Patterns of Technological Innovation in Knowledge‐Intensive Business Services

Employing data from a sample of 1,161 small firms, the paper draws broad comparisons between patterns of innovation expenditure and output, innovation networking, knowledge intensity and competition within Knowledge‐Intensive Business Services (KIBS; N = 563) and manufacturing firms (N = 598). In so doing, KIBS are further disaggregated along lines proposed by Miles et al. (1995 Miles, I., Kastrinos, N., Flanagan, K., Bilderbeek, R., den Hertog, P., Huitink, W. and Bouman, M. 1995. Knowledge Intensive Business Services: Their Role as Users, Carriers and Sources of Innovation EIMS Publication No. 15, Innovation Programme, DGXIII, Luxembourg [Google Scholar]). That is, as technology‐based KIBS (t‐KIBS; N = 264) and professional KIBS (p‐KIBS; N = 299). However, detailing such broad patterns is preliminary. The principal interest of the paper is in identifying the factors associated with higher levels of innovativeness, within each sector, and the extent to which such “success” factors vary across sectors. The results of the analysis appear to offer support for some widely held beliefs about the relative roles of “softer” and “harder” sources of knowledge and technology within services and manufacturing (Tether, 2004 Tether, B. 2004. Do Services Innovate (Differently)?, Manchester: University of Manchester. CRIC Discussion Paper 66 [Google Scholar]). However, some important qualifications are also apparent.