Knowledge intensive Business Services - presentation for 2010 IME seminar in Manchester MSc course

1. Knowledge Intensive Business Services - KIBS Ian Miles [email_address] IME service innovation seminar 7

2. Sets of Services Whole Economy Including nonservices – AFF, extractive, construction, manufacturing, utilities SERVICES Business-related Services KIBS Business Services

7. How important are these services? …share of economy…. Eurostat, 2007, European Business 15.5% EU employment; 14.5% VA

8. Relative Scale of various BS in the UK, 2000 Rapid growth, across industrial world 0 10 20 30 40 50 60 70 VALUE ADDED bn euros

9. KIBS Graduate-Intensity ??? CIS3 data, UK “ technology-based KIBS” "professional KIBS"

11. Knowledge of internal characteristics and external environments – Competitors Clients, Suppliers Collaborators Regulators Financiers Markets Social & Institutional Env Natural & Physical Env Process Technology Management Organisational Structure/ Design Routines Techniques Human Resources Product Technology & Design Health and Safety

13. Knowledge Intermediators Universities Laboratories Governments Other KIBS Clients Suppliers etc. External (generic) knowledge resources * Firm’s absorption of knowledge KIBS synthesising and translating generic knowledge Intelligence Diagnosis Prescription (Configuration) Implementation

14. Its an Interactive Process! Universities Laboratories Governments Other KIBS Clients Suppliers etc. External (generic) knowledge resources * * including previous service encounters Client’s knowledge and experienced problem KIBS fusing generic and local knowledge – and creating new knowledge through R&D etc Intelligence Diagnosis Prescription (Configuration) Implementation Preliminary Problem Formulation Coproduction and Absorption of Solution

17. Relations with Clients are Central Client Problem formulation Agreement on shared problem definition Interaction around features of problem Delivery of solution Implementation of solution Reaction to client’s formulation of problem Agreement on shared problem definition Interaction around features of problem Formulation of solution Delivery of solution Ongoing support – “afterservice” Information interchanges Service Firm

19. Work Experience across Sectors

20. Work Experience across Sectors

21. KIBS are often particularly innovative - UK CIS4 data Manufactured product Service Product (good) (service) UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA Product Innovation

22. KIBS are often particularly innovative 2 - UK CIS4 data UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA Process Innovation

23. KIBS are often particularly innovative 4 - UK CIS4 data UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA NOVEL Innovation: new to market or industry

24. KIBS are often particularly innovative 5 - UK CIS4 data UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA Innovation Expenditure per employee

25. Structure of Innovation Spend in Services UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA Innovation Expenditure

26. Business Services UK CIS4 data: “ Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA Innovation Expenditure

27. Effecting Innovation 1 KIBS Innovation Data production, processing, knowledge generation, generalisation, synthesis methods; presentation tools; specific technologies and techniques for problem area... Client Innovation Reduced risks, accelerated learning, new ideas, training, freer resources, focus on core problems Coproduction of Innovation Interactive learning about problems and potential solutions; new market opportunities

28. Its an Interactive Process! Universities Laboratories Governments Other KIBS Clients Suppliers etc. External (generic) knowledge resources * * including previous service encounters Client’s knowledge and experienced problem KIBS fusing generic and local knowledge – and creating new knowledge through R&D etc Intelligence Diagnosis Prescription (Configuration) Implementation Preliminary Problem Formulation Coproduction and Absorption of Solution

29. Interactive Innovation External (generic) knowledge resources Firm’s experience of problem KIBS fusing generic and local knowledge Preliminary Problem Formulation Coproduction and Absorption of Solution Intelligence Diagnosis Prescription Configuration Implementation Knowledge of environments & technologies; scientific & engineering principles; innovation-relevant market conditions, regulations, laws Better understanding of problem, ways of measuring and monitoring Reduced risk in defining solution; introduction of new types of solution Easier learning and application of experience in combining processes Saving resources that can be applied to core products, processes - & other goals

30. Swedish KIBS Survey (N ä hlinder) 1000 KIBS firms (Higher for less standardised services) (All higher for more innovative firms)

31. UK environmental services 100 firms, 1995 Orientation to technology

32. Hipp - German Survey Services vary in standardisation… some more designed for clients… especially in KIBS Surprisingly low specialisation – may depend on question – cf Nahlinder

34. But what is the User’s View ? PWC study of consultants’clients 2006 180 clients, large range of consultancy services http://www.wwyltc.com/Ensuring-sustainable-value-from-consultants.pdf

35. The User’s View ? PWC study of consultants’clients, 2006 180 clients, large range of consultancy services

36. User’s View of Benefits – PWC 2006

38. Main conclusions on the industry

39. Main conclusions on users

40. Muller and Zenker– KIBS & SMEs Muller E, & A Zenker (2001) "Business services as actors of knowledge transformation: the role of KIBS in regional and national innovation systems" Research Policy vol 30 no 9 pp 1501-1516.

41. BS and their users’ performance – Value added ECORYS analysis of EU15 data

42. BS and their users’ performance – employment and productivity more complicated! ECORYS analysis of EU15 data

43. Who are the Users? Input Output data Various EU countries, c1995 Intensive users Major markets

44. Survey of Swedish KIBS Services Manufacturing Public Sector Households Ranking of users First Second Third Fourth

45. Who are the Users? UK 1995 UK - Business Services mainly supporting other services Computer R&D Other bus. services services services

46. Who are the Users? France 1995 France - Business Services mainly supporting other services, except R&D services Computer R&D Other bus. services services services

47. Top Ten Users- R&D Services UK c1995 85% of output goes to top 20 - 9 are services, many public

51. End of Presentation