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This paper explores the management of innovation in project-based firms. Our research indicates that the traditional boundary between manufacturing and services is becoming obsolete as new forms of manufacturing emerge to supply physical products packaged together with intangible services. Many complex products are now designed, produced and operated as discrete or small batch projects, leading to a growth in firms specialising in project-based activities. These range from the provision of specialist services to co-ordination and systems integration. Not enough is known about how project-based firms manage technology. This paper attempts to develop a framework for understanding the dynamics of project-based firms. It offers a new approach to understanding how they improve performance by focusing on the development of technical capabilities in the context of the provision of enhanced services.
Gann et al. (Tue,) studied this question.