Service Innovation

Research Theme: Service Innovation and Innovative Performance at the Sector Level

Project LeaderProfessor Bruce Tether

Researchers : Dr Andrea Mina, Dr Cher Li, Dr Elif Bascavusoglu-Moreau, Professor Alan Hughes, Professor Jonathan Haskel, Professor Stan Metcalfe, Dr Ken Coutts, Dr Bob Rowthorn, Dr Bill Martin

Project Period : October 2009 – October 2012

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Project Overview

It is well known that the UK and other advanced economies are very largely service economies, and it is increasingly recognized that intangible investments are more important, but less well understood, than tangible investments in driving firm performance and economic growth. Much less is known, however, about the variety that exists within (knowledge intensive) services, the interactions between (knowledge intensive) services and manufacturing, and how various intangibles contribute to performance and growth. Within this context our work-strands sought to examine these issues and was undertaken at both the macro (or economy wide) level and at the micro (or firm) level.

The team has had work accepted for publication and published in academic journals, including:

Two book chapters are also forthcoming:

  • Salter, A. and Tether, B.S. (forthcoming), ‘Innovation in Services: An Overview’, in Haynes K. and Grugulis I. (eds), ‘Managing Services: Challenges and Innovations’, Oxford University Press.
  • Tether, B.S. (2014) ‘Services, Innovation and the Management of Service Innovation’, in Dodgson, M., Gann, D. and Phillips, N. (eds.) Oxford Handbook of Innovation Management, Oxford University Press.

Other papers have been submitted to journals which have asked us to revise and resubmit.  These include:

  • Goodridge P, Haskel J, and Wallis G, (2013), ‘Spillovers from R&D and other intangible investment: evidence from UK industries’
  • Haskel, J, and Pesole, A., (2013), ‘Productivity Growth in UK Financial Services: An Intangible Assets Approach’
  • Li, Q.C., Tether, B.S., Mina, A. and Wennberg, K. (2012) Diversification and Human Capital as Antecedents of Internationalization amongst Professional Service Firms: A Study of UK Based Engineering Consultants.
  • Tether, B.S. and Stigliani, I. (2012) No Fools, No Rushing: Entrepreneurial Actions to Imagine, Create, Nurture and Legitimate a New Industry (The Case of Service Design Consulting in the UK).
  • Wennberg, K., Tether, B.S., Li, Q.C. and Mina, A.(2012) Taking or Eschewing Opportunities? Diversification in Professional Service Firms.
  • Mina, A., Bascavusoglu-Moreau, E. and Hughes, A. (2012) ‘Open Service Innovation and Firm’s Search for External Knowledge’

UK~IRC published Reports and Officially Commissioned Reports The Foresight Programme on the Future of UK Manufacturing commissioned the writing of 2 reports:

  • Coutts, K. and Rowthorn, R. (Forthcoming 2013) “De-Industrialisation and the balance of Payments” to be published with the Foresight Future of Manufacturing Report in 2013.
  • Coutts, K. and Rowthorn, R. (Forthcoming 2013) “Scenario Models of the Future of UK Trade in Manufacturing and Services”, to be published with the Foresight Future of Manufacturing Report in 2013.

Both of these reports were authored by Ken Coutts and Bob Rowthorn and will be published with the main Foresight Programme report in October 2013. Bill Martin and Robert Rowthorn also continued their work on macro-modelling and publishing a report: Is the British economy supply constrained II? A renewed critique of productivity pessimism. The report developed the analysis by Bill Martin in his previous UK~IRC’s report Is the British Economy constrained? published in July 2011. This report received wide coverage in national and trade press including FT and BBC online news pages.

Jonathan Haskel continues his pioneering work (partially in association with NESTA and the Intellectual Property Office) on the significance of investments in knowledge (or ‘intangibles’) in the UK economy. The project team also presented papers at various international conferences, including the Academy of Management Annual Meeting, Boston; the 14th International Schumpeter Society Conference, Brisbane; the 9th Annual International Industrial Organization Conference, Boston and the DRUID Society Conference, Copenhagen, June.  Papers were also presented at seminars, including at Manchester Business School, University of Rome La Sapienza and the School of Management at the University of Southampton. In December 2012 Bruce Tether acted as an invited discussant at the OECD for their final conference of the INNOSERV project.  This examined innovation in services, and shows that this topic remains one of considerable interests amongst policymakers around the world.

Bruce Tether also continued his collaboration with the Architects Journal and New Civil Engineer, leading professional magazines for architects and civil engineers respectively.  He analyses the firm level data gathered by both of these journals to form the basis of the annual AJ100 list of architecture practices and NCE’s ‘Consultants File’ respectively. These analyses are both published in the journals annually.  He also sits on the associated judging panels which determine various prizes for ‘architectural practices of the year’ and ‘engineering consultancies of the year’.  These activities have led to a further collaboration with the Association for Consultancy and Engineering, which celebrates its 100th anniversary in 2013.  Bruce Tether will provide an commentary on how the sector has developed and grown over time.

We are also very pleased to report that two of the researchers heavily involved with this project have been appointed to faculty positions at leading universities.  Dr Andrea Mina has been appointed University Lecturer in the Economics of Innovation at the Judge Business School, University of Cambridge, whilst Dr Cher Li has been appointed Associate Professor in Industrial Economics at Nottingham University Business School.  Many congratulations to both; both are committed to contributing further to the research articles and other outputs that this project will produce in due course and are Research Associates of the UK~IRC.

Going Forward: Although the official period for this project has finished all of the researchers continue to work in this area of research and use the survey and case study data associated with this project. Ongoing activities include: – a survey of several leading UK service industries, focusing on professional service firms, of KIBs and the UK economy interacting with this aspect of the service sector. – to extend the analysis of the relationship between services and manufacturing and how servicetisation may change the nature of manufacturing in the UK. –      Continue the background analysis of macro constraints and the implications for rebalancing the economy.
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