Innovation came to the fore from the 1970s on, as vital for competitiveness, growth, QOL…
Basic ideas like the linear model were rejected, and mass of knowledge created about conditions for successful innovation, diffusion processes, different types of innovation (incremental, radical, revolutionary, disruptive; product, process; etc.) and so on.
But most analysis remained based on certain areas of the economy – mainly private manufacturing, esp. high-tech manufacturing; and on certain types of innovation, esp. technology-based.
Service industries were generally written off as “supplier-driven” sectors, at best adopting innovations developed by manufacturing industry. Until the later ’80s and ’90s they were typically excluded from R&D and innovation statistics.
UK data – CIS4, 2005 Percentages reporting innovations of different types; firms with 10+ employees percentage The IT revolution saw services adopting the new technologies and doing new things with them. And from the mid 1990s the CIS included some services.
UK data – CIS4, 2005 Services do innovate – if somewhat less frequently than manufacturing. (Some services are well above the manufacturing average – notably T-KIBS). Manufacturers and other primary and secondary sector firms introduce new services Services introduce new goods – credit cards, goods for hire, and more – surprisingly often
Large variation in innovation style across sectors - CIS5 data, EU (2007) R&D Market Development “ Supplier-driven” Training
Also “organisational” innovation Percentages reporting innovations of different types;’ firms with 10+ employees Knowledge-based Services are particularly active organisational innovators.
Information technology is important for ALL services – and we believe that new developments will make it even more so .
Service sectors innovate in different ways (though there are firms with different styles in all sectors)
High-tech KIBS are much like other high-tech firms (R&D and technology acquisition). Large service firms often organise their R&D like manufacturers.
Otherwise formal innovation management (esp. R&D management structures) is rare. New product and project development team structures are most common.
Professional KIBS (and creative services) are also very innovative. But they rely more on professional networks and in-practice ad-hoc innovation. Problems of capturing and replicating innovations.
Public services have distinctive patterns. Some have elaborate R&D; others much less well-articulated.
Many (traditional) services are fairly low in terms of reported innovation, other than that related to new equipment and software. They have poor links to wider innovation systems. But their innovativeness is understated in standard statistics.
Organisational change is relatively more important for service firms. (But note that technological innovators also tend to be organisational innovators).