Service Innovation Project Update 2013

Project Summary

The focal point of this research will be knowledge-intensive business services (KIBS). The UK has undergone a transition to a knowledge based economy with an increasingly important service component. This profound transformation is marked by a more sophisticated division of labour between the producers and users of different kinds of knowledge, the emergence of new forms of business whose purpose is to develop knowledge and trade information and in a rapid growth of the business services sector. The growth of this group of activities in the UK in terms of shares of overall economic activity and contribution to trade has been internationally unprecedented (Coutts and Rowthorn, 2004). The role of innovation in these sectors has been relatively neglected and raises important conceptual and empirical issues (Salter and Tether, 2006; Abreu et al., 2008).

We are therefore carrying out a strand of research on services innovation which focuses on KIBS and which addresses the following key questions:

  • How is the input-output structure of the business service sector changing alongside its international trade performance?
  • How sustainable is the UK competitive position?
  • How are sectoral innovation systems in knowledge-intensive business services organised?
  • How have they evolved over time and with what future prospects?
  • How does innovation take place at the firm and industry levels?
  • With what consequences for firm and industry organisation? And with what implications for strategy and policy?

Implications for Policy and PracticeThis project will provide important evidence for understanding the linkages between different sectors of the UK economy and how innovation in one sector influences innovation and performance in another sector. This will shed light on the hidden innovation agenda as it will indicate how the impact of policy diffuses throughout the economy including to those sectors that are conventionally considered as non or low innovators. It will also bear directly on the emerging policy concern of innovation ecology and sector specific policy design.

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