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Policies to enhance the ‘hidden innovation’ in services: evidence and lessons from the UK

Policies to enhance the ‘hidden innovation’ in services: evidence and lessons from the UK
Policies to enhance the ‘hidden innovation’ in services: evidence and lessons from the UK
More than 75% of the UK economy is based on services. Knowledge-based services generate more than five times as much value added for the UK economy as advanced manufacturing. Yet, there are persistent gaps in understanding the innovative performance of services. Using Fourth UK Community Innovation Survey (CIS4) data and the results of a detailed case study analysis, this article helps to fill this gap by analysing what innovation in services means and how it can be measured. The traditional indicators of innovation inputs (such as levels of R&D expenditures) and innovation outputs (such as the number of patents) suggest that services are less innovative than other branches of the economy. We take into account a larger spectrum of innovation indicators, both in terms of innovation inputs and outputs, to analyse whether the intensity, nature and economic impact of innovation significantly varies between the manufacturing and service sectors in UK, and between different parts of the services sector such as knowledge-intensive business services and traditional services. The results of the empirical analysis identify the ‘hidden parts’ of innovation in services, that is, the innovative activities and successful innovative outputs that are traditionally underestimated by the use of metrics based on R&D and patents. We suggest a wide range of policy measures specifically targeted at enhancing innovation in services; the UK service economy needs more focus on learning and the training of personnel, and a new balance of policy to support both R&D and non-R&D innovation activities.

service sectors, innovation metrics, innovation performance, innovation policy
0264-2069
99-118
Abreu, Maria
c7d09307-602c-4443-9189-0468ba1c7d84
Grinevich, Vadim
278ee424-e2bd-4df1-9844-e9f7563e3186
Kitson, Michael
4a1d4831-2d21-4d91-a24a-3cbe08e4ca54
Savona, Maria
e902a521-573e-4e25-a882-020e21c17d71
Abreu, Maria
c7d09307-602c-4443-9189-0468ba1c7d84
Grinevich, Vadim
278ee424-e2bd-4df1-9844-e9f7563e3186
Kitson, Michael
4a1d4831-2d21-4d91-a24a-3cbe08e4ca54
Savona, Maria
e902a521-573e-4e25-a882-020e21c17d71

Abreu, Maria, Grinevich, Vadim, Kitson, Michael and Savona, Maria (2010) Policies to enhance the ‘hidden innovation’ in services: evidence and lessons from the UK. The Service Industries Journal, 30 (1), 99-118. (doi:10.1080/02642060802236160).

Record type: Article

Abstract

More than 75% of the UK economy is based on services. Knowledge-based services generate more than five times as much value added for the UK economy as advanced manufacturing. Yet, there are persistent gaps in understanding the innovative performance of services. Using Fourth UK Community Innovation Survey (CIS4) data and the results of a detailed case study analysis, this article helps to fill this gap by analysing what innovation in services means and how it can be measured. The traditional indicators of innovation inputs (such as levels of R&D expenditures) and innovation outputs (such as the number of patents) suggest that services are less innovative than other branches of the economy. We take into account a larger spectrum of innovation indicators, both in terms of innovation inputs and outputs, to analyse whether the intensity, nature and economic impact of innovation significantly varies between the manufacturing and service sectors in UK, and between different parts of the services sector such as knowledge-intensive business services and traditional services. The results of the empirical analysis identify the ‘hidden parts’ of innovation in services, that is, the innovative activities and successful innovative outputs that are traditionally underestimated by the use of metrics based on R&D and patents. We suggest a wide range of policy measures specifically targeted at enhancing innovation in services; the UK service economy needs more focus on learning and the training of personnel, and a new balance of policy to support both R&D and non-R&D innovation activities.

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More information

e-pub ahead of print date: 12 November 2009
Published date: 2010
Keywords: service sectors, innovation metrics, innovation performance, innovation policy
Organisations: Strategy, Innovation & Entrepreneurship

Identifiers

Local EPrints ID: 357112
URI: https://eprints.soton.ac.uk/id/eprint/357112
ISSN: 0264-2069
PURE UUID: ef692580-b56d-46b1-b56a-59b0fad18736

Catalogue record

Date deposited: 04 Oct 2013 12:57
Last modified: 18 Jul 2017 03:35

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