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:: Science & Technology
How research and innovation differ
Science & Technology 1/8/2005 8:57:09 AM

Innovation in services
What about innovation in services? [...] Similarly to high tech, or LMT sectors, services encompass a wide variety of sectors. As a consequence, a first step is grouping them in a taxonomy based on physical services (transport), human services (welfare state services- pensions, waste disposal services...) and information services (consultancies). In all three groups, adoption of information technology is very important. In addition, similarly to what experienced for LMT, a reverse product cycle may take place in that changes in existing processes (due to IT) lead later on to changes in service products (Barras,1986). However this has to be qualified because many innovations are non-IT based.

In any case several service sectors have inertia and are slow in becoming highly innovative-a heritage form the past, because then firms did not pay that much attention to innovation strategies, nor had links with universities, government laboratories and so on. There are some exceptions: rail, broadcasting and telecommunication services (closely related to manufacturing). Also financial and retailing services (such as supermarkets) and business services (such as consultancies and training services) have been rather innovative.

In general, from surveys one finds that service firms tend to stress human resources and acquisitions rather than formal R&D. When formal R&D is undertaken it tends to be done on a project basis rather than being organized through R&D laboratories. Technological innovation is not important but organizational innovation is. The sources of innovation are both within the firms and from interaction with customers.

Innovation in supporting services such as knowledge intensive business services (KIBS) is becoming more and more relevant. KIBS are problem solvers and are very active in the innovative activities of their client firms and sectors: as coproducers of innovation (with the client), as orchestrators of innovation (contract R&D services), as orchestrator of innovation networks (developing long lasting collaboration between different firms) and as brokers to facilitate distributed innovation processes (mechanical test for companies). KIBS are different from research and transfer organizations which also supply services: they are more academic, have more applied research oriented projects and have a more public good type of functions - standards, metrics, awareness programs.

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