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Openness, knowledge, innovation and growth in UK business services

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  • Love, James H.
  • Roper, Stephen
  • Bryson, John R.

Abstract

We explore the causal links between service firms’ knowledge investments, their innovation outputs and business growth based on a bespoke survey of around 1100 UK service businesses. We combine the activity based approach of the innovation value chain with firms’ external links at each stage of the innovation process. This introduces the concept of ‘encoding’ relationships through which learning improves the effectiveness of firms’ innovation processes. Our econometric results emphasise the importance of external openness in the initial, exploratory phase of the innovation process and the significance of internal openness (e.g. team working) in later stages of the process. In-house design capacity is strongly linked to a firm's ability to absorb external knowledge for innovation. Links to customers are important in the exploratory stage of the innovation process, but encoding linkages with private and public research organisations are more important in developing innovation outputs. Business growth is related directly to both the extent of firms’ service innovation as well as the diversity of innovation, reflecting marketing, strategic and business process change.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 40 (2011)
Issue (Month): 10 ()
Pages: 1438-1452

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Handle: RePEc:eee:respol:v:40:y:2011:i:10:p:1438-1452

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Web page: http://www.elsevier.com/locate/respol

Related research

Keywords: Open innovation; Services; Innovation value chain; Encoding linkages;

References

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  31. repec:fth:inseep:9833 is not listed on IDEAS
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Citations

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Cited by:
  1. Mina, Andrea & Bascavusoglu-Moreau, Elif & Hughes, Alan, 2014. "Open service innovation and the firm's search for external knowledge," Research Policy, Elsevier, vol. 43(5), pages 853-866.
  2. Matthijs Janssen & Carolina Castaldi & Alexander Alexiev, 2014. "Dynamic capabilities for service innovation: conceptualization and measurement," Working Papers 14-07, Eindhoven Center for Innovation Studies, revised Mar 2014.
  3. Marina Doroshenko & Ian Miles & Dmitri Vinogradov, 2013. "Knowledge Intensive Business Services As Generators Of Innovations," HSE Working papers WP BRP 12/STI/2013, National Research University Higher School of Economics.

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