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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.

Suggested Citation

  • Love, James H. & Roper, Stephen & Bryson, John R., 2011. "Openness, knowledge, innovation and growth in UK business services," Research Policy, Elsevier, vol. 40(10), pages 1438-1452.
  • Handle: RePEc:eee:respol:v:40:y:2011:i:10:p:1438-1452 DOI: 10.1016/j.respol.2011.05.016
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:respol:v:46:y:2017:i:8:p:1505-1518 is not listed on IDEAS
    2. Pina, Katia & Tether, Bruce S., 2016. "Towards understanding variety in knowledge intensive business services by distinguishing their knowledge bases," Research Policy, Elsevier, vol. 45(2), pages 401-413.
    3. Alexiev, Alexander S. & Volberda, Henk W. & Van den Bosch, Frans A.J., 2016. "Interorganizational collaboration and firm innovativeness: Unpacking the role of the organizational environment," Journal of Business Research, Elsevier, vol. 69(2), pages 974-984.
    4. Machado Léo, Ricardo & Tello‐Gamarra, Jorge, 2016. "Inovac¸ão em servic¸os: estado da arte e perspectivas futuras
      [Innovation in services: state of the art and future perspectives]
      ," MPRA Paper 82195, University Library of Munich, Germany, revised 29 Mar 2017.
    5. Miozzo, Marcela & Desyllas, Panos & Lee, Hsing-fen & Miles, Ian, 2016. "Innovation collaboration and appropriability by knowledge-intensive business services firms," Research Policy, Elsevier, vol. 45(7), pages 1337-1351.
    6. Stanko, Michael A. & Henard, David H., 2017. "Toward a better understanding of crowdfunding, openness and the consequences for innovation," Research Policy, Elsevier, vol. 46(4), pages 784-798.
    7. Charlie Karlsson & Sam Tavassoli, 2016. "Innovation strategies of firms: What strategies and why?," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1483-1506, December.
    8. repec:ove:journl:aid:11244 is not listed on IDEAS
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    10. repec:wsi:ijimxx:v:21:y:2017:i:01:n:s1363919617500037 is not listed on IDEAS
    11. 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.
    12. 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.
    13. Leon, Ramona – Diana & Rodríguez-Rodríguez, Raúl & Gómez-Gasquet, Pedro & Mula, Josefa, 2017. "Social network analysis: A tool for evaluating and predicting future knowledge flows from an insurance organization," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 103-118.
    14. repec:spr:scient:v:104:y:2015:i:3:d:10.1007_s11192-015-1628-0 is not listed on IDEAS
    15. Schøtt, Thomas & Jensen, Kent Wickstrøm, 2016. "Firms’ innovation benefiting from networking and institutional support: A global analysis of national and firm effects," Research Policy, Elsevier, vol. 45(6), pages 1233-1246.
    16. Witell, Lars & Snyder, Hannah & Gustafsson, Anders & Fombelle, Paul & Kristensson, Per, 2016. "Defining service innovation: A review and synthesis," Journal of Business Research, Elsevier, vol. 69(8), pages 2863-2872.
    17. McGuirk, Helen & Lenihan, Helena & Hart, Mark, 2015. "Measuring the impact of innovative human capital on small firms’ propensity to innovate," Research Policy, Elsevier, vol. 44(4), pages 965-976.
    18. Bourke, Jane & Roper, Stephen, 2016. "AMT adoption and innovation: An investigation of dynamic and complementary effects," Technovation, Elsevier, vol. 55, pages 42-55.
    19. 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.

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