The most rapid growth has come from knowledge-intensive business services.
These support the whole economy, and thus growth, competitiveness, quality of life – and will be vital for sustainability, too.
They do this through their roles in innovation, supplying knowledge to support efficiency and flexibility – and to help adaptation and creativity.
(Side-Note on Service Trade) Average annual change in OECD service exports 1999–2004 Source: William Cave (2006 OECD WP), from OECD TIS 2006 Total service exports 2004: $2234bn – Half of which is Travel & Transport ; Focus of trade : 1/3 trade intra-Europe, ½ intra- Europe and N America Distance is more important for services trade than for goods trade About 20% of all trade is services – fairly static share– well below economic scale of services
This varies across sectors: high-tech KIBS are much like other high-tech firms (R&D and technology acquisition).
Otherwise innovation management (esp. R&D management structures) is rare outside of the biggest service firms.
Professional KIBS (and creative services) are also very innovative, but based more on professional networks and in-practice ad-hoc innovation.
Public services have distinctive patterns.
Some other services are fairly low in terms of innovation, other than that related to new equipment and software – though innovation* is understated in standard statistics – and poor links to wider innovation systems.
Organisational change is relatively more important (though technological innovators also tend to be organisational innovators).
Innovation in these elements is poorly measured and understood - with a few exceptions (Information Systems, ecommerce, logistics…)
Innovation management at firm level often fails to deal with these elements.
Skill needs are, again, challenging. General need to combine managerial, domain, technology and service capabilities.
How KIBS function Client Problems Client Problems Generic Knowledge KIBS communities “Science Base” Technology and training providers Client Problems Local knowledge derived from client
Advancing the study of service innovation Service/Innovation Policymakers Service Providers Generic Knowledge KIBS communities Services and Innovation Research Communities Technology and training providers Service Providers Specific innovation experiences, including action research