Internal R&D and external information in knowledge-intensive business service innovation: complements, substitutes or independent?
Abstract
This paper analyses the effect of internal R&D and of external sources of information on the innovation performance of Knowledge intensive business services (KIBS). The analysis is based on an establishment-level survey covering the period of 2011–2014 in Canada (Quebec). In order to determine the influence of different external information sources on innovation and the extent to which internal R&D and the use of external information sources are related to innovation, a series of logistic regressions are performed on four different measures of innovation. The results show that KIBS innovation is positively connected to market-related information sources (but not to research and academic sources), that KIBS innovation is positively associated with the performance of R&D, and that there are no synergies associated with the combined performance of R&D and external information gathering: their effects are independent and additive. These results share some similarities, but also some important differences, with those that have been obtained from the study of R&D and external information sourcing in manufacturing establishments.
Keyword : R&D, external sources of innovation, innovations, KIBS, Canada, logistic regression
How to Cite
Doloreux, D., Shearmur, R., & Rodriguez, M. (2018). Internal R&D and external information in knowledge-intensive business service innovation: complements, substitutes or independent?. Technological and Economic Development of Economy, 24(6), 2255-2276. https://doi.org/10.3846/tede.2018.5694
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Becheikh, N., Landry, R., & Amara, N. (2006). Lessons from innovation empirical studies in the manufacturing sector: a systematic review of the literature from 1993-2003. Technovation, 26(5-6), 644-664. https://doi.org/10.1016/j.technovation.2005.06.016
Belderbos, R., Carree, M., Lokshin, B., & Fernández-Sastre, J. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer, 40(1), 123-137. https://doi.org/10.1007/s10961-014-9332-4
Bettencourt, L. A., Ostrom, A. L., Brown, S. W., & Roundtree, R. I. (2002). Client co-production in knowledge-intensive business services. California Management Review, 44(4), 100-128. https://doi.org/10.2307/4116614
Bianchi, M., Croce, A., Dell’Era, C., Di Benedetto, C. A., & Frattini, F. (2016). Organizing for inbound open innovation: how external consultants and a dedicated R&D unit influence product innovation performance. Journal of Product Innovation Management, 33(4), 492-510. https://doi.org/10.1111/jpim.12302
Cassiman, B., & Valentini, G. (2016). Open innovation: are inbound and outbound knowledge flows really complementary?. Strategic Management Journal, 37(6), 1034-1046. https://doi.org/10.1002/smj.2375
Cassiman, B., & Veugelers, R. (2006). In search of complementarity in innovation strategy: internal R&D and external knowledge acquisition. Management Science, 52(1), 68-82. https://doi.org/10.1287/mnsc.1050.0470
Chang, S.-J., Van Witteloostuijn, A., & Eden, L. (2010). From the editors: common method variance in international business research. Journal of International Business Studies, 41(2), 178-184. https://doi.org/10.1057/jibs.2009.88
Chen, Y., Wanhaverbeke, W., & Du, J. (2016). The interaction between internal R&D and different types of external knowledge sourcing; an empirical study of Chinese innovative firms. R&D Management, 46(S3), 1006-2013. https://doi.org/10.1111/radm.12162
Clausen, T. H., Korneliussen, T., & Madsen, E. L. (2013). Modes of innovation, resources and their influence on product innovation: empirical evidence from R&D active firms in Norway. Technovation, 33(6-7), 225-233. https://doi.org/10.1016/j.technovation.2013.02.002
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 35, 128-152. https://doi.org/10.2307/2393553
Dahlander, L., & Gann, D. M. (2010). How open is innovation? Research Policy, 39(6), 699-709. https://doi.org/10.1016/j.respol.2010.01.013
Denicolai, S., Ramirez, M., & Tidd, J. (2016). Overcoming the false dichotomy between internal R&D and external knowledge acquisition: absorptive capacity dynamics over time. Technological Forecasting and Social Change, 104, 57-65. https://doi.org/10.1016/j.techfore.2015.11.025
Derudder, B., & Taylor, P. (2016). Change in the world city network, 2000–2012. The Professional Geographer, 68(4), 624-637. https://doi.org/10.1080/00330124.2016.1157500
Djellal, F., Francoz, D., Gallouj, C., Gallouj, F., & Jacquin, Y. (2003). Revising the definition of research and development in the light of the specificities of services. Science and Public Policy, 30(6), 415-429. https://doi.org/10.3152/147154303781780227
Doloreux, D., & Shearmur, R. (2013). Innovation strategies: are knowledge-intensive business services just another source of information? Industry & Innovation, 20(8), 719-738. https://doi.org/10.1080/13662716.2013.856623
Doloreux, D., Shearmur, R., & Rodriguez, M. (2016). Determinants of R&D in knowledge-intensive business services firms. Economics of Innovation and New Technology, 25(4), 391-405. https://doi.org/10.1080/10438599.2015.1067001
Freel, M. (2006). Patterns of technological innovation in knowledge – intensive business services. Industry & Innovation, 13(3), 335-358. https://doi.org/10.1080/13662710600859157
Love, J. H., & Roper, S. (2009). Organizing the Innovation process: complementarities in innovation networking. Industry & Innovation, 16(3), 273-290. https://doi.org/10.1080/13662710902923776
Love, J. H., Roper, S., & Vahter, P. (2014). Dynamic complementarities in innovation strategies. Research Policy, 43(10), 1774-1784. https://doi.org/10.1016/j.respol.2014.05.005
Mansury, M. A., & Love, J. H. (2008). Innovation, productivity and growth in US business services: a firm-level analysis. Technovation, 28(1-2), 52-62. https://doi.org/10.1016/j.technovation.2007.06.002
Miles, I. (2008). Patterns of innovation in service industries. IBM Systems Journal, 47(1), 115-128. https://doi.org/10.1147/sj.471.0115
Mina, A., Bascavusoglu-Moreau, E., & Hughes, A. (2014). Open service innovation and the firm’s search for external knowledge. Research Policy, 43(5), 853-866. https://doi.org/10.1016/j.respol.2013.07.004
Monteiro, F., Mol, M., & Birkinshaw, J. (2017). Ready to be open? Explaining the firm level barriers to benefiting from openness to external knowledge. Long Range Planning, 50(2), 282-295. https://doi.org/10.1016/j.lrp.2015.12.008
OECD. (2005). Oslo manual: guidelines for collecting and interpreting innovation data. Oslo Manual (3rd ed.), (162 p.).
Pina, K., & Tether, B. S. (2016). Towards understanding variety in knowledge intensive business services by distinguishing their knowledge bases. Research Policy, 45(2), 401-413. https://doi.org/10.1016/j.respol.2015.10.005
Prajogo, D. I., McDermott, C. M., & McDermott, M. A. (2013). Innovation orientations and their effects on business performance: contrasting small- and medium-sized service firms. R&D Management, 43(5), 486-500. https://doi.org/10.1111/radm.12027
Polèse, M., & Shearmur, R. (2004). Culture, language, and the location of high-order service functions: the case of Montreal and Toronto. Economic geography, 80(4), 329-350.
Rodríguez, A., & Nieto, M. J. (2012). The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation. The Service Industries Journal, 32(7), 1057-1075.
Rodriguez, M., Doloreux, D., & Shearmur, R. (2016). Innovation strategies, innovator types and openness: a study of KIBS firms in Spain. Service Business, 10(3), 629-649. https://doi.org/10.1007/s11628-015-0286-x
Rothwell, R. (1991). External networking and innovation in small and medium-sized manufacturing firms in Europe. Technovation, 11(2), 93-112. https://doi.org/10.1016/0166-4972(91)90040-B
Santamaría, L., Nieto, M. J., & Barge-Gil, A. (2010). The relevance of different open innovation strategies for R&D performers. Cuadernos de Economia Y Direccion de La Empresa, (45), 93-114 https://doi.org/10.1016/S1138-5758(10)70025-6
Shearmur, R. (2015). Far from the Madding Crowd: slow innovators, information value, and the geography of innovation. Growth and Change, 46(3), 424-442. https://doi.org/10.1111/grow.12097
Shearmur, R., & Doloreux, D. (2015). Knowledge-Intensive Business Services (KIBS) use and user innovation: high-order services, geographic hierarchies and internet use in Quebec’s manufacturing sector. Regional Studies, 49(10), 1654-1671. https://doi.org/10.1080/00343404.2013.870988
Spithoven, A., & Teirlinck, P. (2015). Internal capabilities, network resources and appropriation mechanisms as determinants of R&D outsourcing. Research Policy, 44(3), 711-725. https://doi.org/10.1016/j.respol.2014.10.013
Teirlinck, P., & Spithoven, A. (2013). Formal R&D management and strategic decision making in small firms in knowledge-intensive business services. R and D Management, 43(1), 37-51. https://doi.org/10.1111/j.1467-9310.2012.00701.x
Tether, B. S. (2005). Do services innovate (differently)? insights from the European innobarometer survey. Industry & Innovation, 12(2), 153-184. https://doi.org/10.1080/13662710500087891
Tether, B. S., Li, Q. C., & Mina, A. (2012). Knowledge-bases, places, spatial configurations and the performance of knowledge-intensive professional service firms. Journal of Economic Geography, 12(5), 969-1001. https://doi.org/10.1093/jeg/lbs015
Tödtling, F., Lehner, P., & Kaufmann, A. (2009). Do different types of innovation rely on specific kinds of knowledge interactions? Technovation, 29(1), 59-71. https://doi.org/10.1016/j.technovation.2008.05.002
Vega-Jurado, J., Gutiérrez-Gracia, A., & Fernández-de-Lucio, I. (2009). Does external knowledge sourcing matter for innovation? Evidence from the Spanish manufacturing industry. Industrial and Corporate Change, 18(4), 637-670. https://doi.org/10.1093/icc/dtp023
Vivas, C., & Barge-Gil, A. (2015). Impact on firms of the use of knowledge external sources: a systematic review of the literature. Journal of Economic Surveys, 29(5), 943-964. https://doi.org/10.1111/joes.12089
Zahra, S. A., & George, G. (2002). Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review, 27(2), 185-203. https://doi.org/10.5465/amr.2002.6587995
Battisti, G., Gallego, J., Rubalcaba, L., & Windrum, P. (2014). Open innovation in services: knowledge sources, intellectual property rights and internationalization. Economics of Innovation and New Technology, 24(3), 223-247. https://doi.org/10.1080/10438599.2014.924745
Becheikh, N., Landry, R., & Amara, N. (2006). Lessons from innovation empirical studies in the manufacturing sector: a systematic review of the literature from 1993-2003. Technovation, 26(5-6), 644-664. https://doi.org/10.1016/j.technovation.2005.06.016
Belderbos, R., Carree, M., Lokshin, B., & Fernández-Sastre, J. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer, 40(1), 123-137. https://doi.org/10.1007/s10961-014-9332-4
Bettencourt, L. A., Ostrom, A. L., Brown, S. W., & Roundtree, R. I. (2002). Client co-production in knowledge-intensive business services. California Management Review, 44(4), 100-128. https://doi.org/10.2307/4116614
Bianchi, M., Croce, A., Dell’Era, C., Di Benedetto, C. A., & Frattini, F. (2016). Organizing for inbound open innovation: how external consultants and a dedicated R&D unit influence product innovation performance. Journal of Product Innovation Management, 33(4), 492-510. https://doi.org/10.1111/jpim.12302
Cassiman, B., & Valentini, G. (2016). Open innovation: are inbound and outbound knowledge flows really complementary?. Strategic Management Journal, 37(6), 1034-1046. https://doi.org/10.1002/smj.2375
Cassiman, B., & Veugelers, R. (2006). In search of complementarity in innovation strategy: internal R&D and external knowledge acquisition. Management Science, 52(1), 68-82. https://doi.org/10.1287/mnsc.1050.0470
Chang, S.-J., Van Witteloostuijn, A., & Eden, L. (2010). From the editors: common method variance in international business research. Journal of International Business Studies, 41(2), 178-184. https://doi.org/10.1057/jibs.2009.88
Chen, Y., Wanhaverbeke, W., & Du, J. (2016). The interaction between internal R&D and different types of external knowledge sourcing; an empirical study of Chinese innovative firms. R&D Management, 46(S3), 1006-2013. https://doi.org/10.1111/radm.12162
Clausen, T. H., Korneliussen, T., & Madsen, E. L. (2013). Modes of innovation, resources and their influence on product innovation: empirical evidence from R&D active firms in Norway. Technovation, 33(6-7), 225-233. https://doi.org/10.1016/j.technovation.2013.02.002
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 35, 128-152. https://doi.org/10.2307/2393553
Dahlander, L., & Gann, D. M. (2010). How open is innovation? Research Policy, 39(6), 699-709. https://doi.org/10.1016/j.respol.2010.01.013
Denicolai, S., Ramirez, M., & Tidd, J. (2016). Overcoming the false dichotomy between internal R&D and external knowledge acquisition: absorptive capacity dynamics over time. Technological Forecasting and Social Change, 104, 57-65. https://doi.org/10.1016/j.techfore.2015.11.025
Derudder, B., & Taylor, P. (2016). Change in the world city network, 2000–2012. The Professional Geographer, 68(4), 624-637. https://doi.org/10.1080/00330124.2016.1157500
Djellal, F., Francoz, D., Gallouj, C., Gallouj, F., & Jacquin, Y. (2003). Revising the definition of research and development in the light of the specificities of services. Science and Public Policy, 30(6), 415-429. https://doi.org/10.3152/147154303781780227
Doloreux, D., & Shearmur, R. (2013). Innovation strategies: are knowledge-intensive business services just another source of information? Industry & Innovation, 20(8), 719-738. https://doi.org/10.1080/13662716.2013.856623
Doloreux, D., Shearmur, R., & Rodriguez, M. (2016). Determinants of R&D in knowledge-intensive business services firms. Economics of Innovation and New Technology, 25(4), 391-405. https://doi.org/10.1080/10438599.2015.1067001
Freel, M. (2006). Patterns of technological innovation in knowledge – intensive business services. Industry & Innovation, 13(3), 335-358. https://doi.org/10.1080/13662710600859157
Love, J. H., & Roper, S. (2009). Organizing the Innovation process: complementarities in innovation networking. Industry & Innovation, 16(3), 273-290. https://doi.org/10.1080/13662710902923776
Love, J. H., Roper, S., & Vahter, P. (2014). Dynamic complementarities in innovation strategies. Research Policy, 43(10), 1774-1784. https://doi.org/10.1016/j.respol.2014.05.005
Mansury, M. A., & Love, J. H. (2008). Innovation, productivity and growth in US business services: a firm-level analysis. Technovation, 28(1-2), 52-62. https://doi.org/10.1016/j.technovation.2007.06.002
Miles, I. (2008). Patterns of innovation in service industries. IBM Systems Journal, 47(1), 115-128. https://doi.org/10.1147/sj.471.0115
Mina, A., Bascavusoglu-Moreau, E., & Hughes, A. (2014). Open service innovation and the firm’s search for external knowledge. Research Policy, 43(5), 853-866. https://doi.org/10.1016/j.respol.2013.07.004
Monteiro, F., Mol, M., & Birkinshaw, J. (2017). Ready to be open? Explaining the firm level barriers to benefiting from openness to external knowledge. Long Range Planning, 50(2), 282-295. https://doi.org/10.1016/j.lrp.2015.12.008
OECD. (2005). Oslo manual: guidelines for collecting and interpreting innovation data. Oslo Manual (3rd ed.), (162 p.).
Pina, K., & Tether, B. S. (2016). Towards understanding variety in knowledge intensive business services by distinguishing their knowledge bases. Research Policy, 45(2), 401-413. https://doi.org/10.1016/j.respol.2015.10.005
Prajogo, D. I., McDermott, C. M., & McDermott, M. A. (2013). Innovation orientations and their effects on business performance: contrasting small- and medium-sized service firms. R&D Management, 43(5), 486-500. https://doi.org/10.1111/radm.12027
Polèse, M., & Shearmur, R. (2004). Culture, language, and the location of high-order service functions: the case of Montreal and Toronto. Economic geography, 80(4), 329-350.
Rodríguez, A., & Nieto, M. J. (2012). The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation. The Service Industries Journal, 32(7), 1057-1075.
Rodriguez, M., Doloreux, D., & Shearmur, R. (2016). Innovation strategies, innovator types and openness: a study of KIBS firms in Spain. Service Business, 10(3), 629-649. https://doi.org/10.1007/s11628-015-0286-x
Rothwell, R. (1991). External networking and innovation in small and medium-sized manufacturing firms in Europe. Technovation, 11(2), 93-112. https://doi.org/10.1016/0166-4972(91)90040-B
Santamaría, L., Nieto, M. J., & Barge-Gil, A. (2010). The relevance of different open innovation strategies for R&D performers. Cuadernos de Economia Y Direccion de La Empresa, (45), 93-114 https://doi.org/10.1016/S1138-5758(10)70025-6
Shearmur, R. (2015). Far from the Madding Crowd: slow innovators, information value, and the geography of innovation. Growth and Change, 46(3), 424-442. https://doi.org/10.1111/grow.12097
Shearmur, R., & Doloreux, D. (2015). Knowledge-Intensive Business Services (KIBS) use and user innovation: high-order services, geographic hierarchies and internet use in Quebec’s manufacturing sector. Regional Studies, 49(10), 1654-1671. https://doi.org/10.1080/00343404.2013.870988
Spithoven, A., & Teirlinck, P. (2015). Internal capabilities, network resources and appropriation mechanisms as determinants of R&D outsourcing. Research Policy, 44(3), 711-725. https://doi.org/10.1016/j.respol.2014.10.013
Teirlinck, P., & Spithoven, A. (2013). Formal R&D management and strategic decision making in small firms in knowledge-intensive business services. R and D Management, 43(1), 37-51. https://doi.org/10.1111/j.1467-9310.2012.00701.x
Tether, B. S. (2005). Do services innovate (differently)? insights from the European innobarometer survey. Industry & Innovation, 12(2), 153-184. https://doi.org/10.1080/13662710500087891
Tether, B. S., Li, Q. C., & Mina, A. (2012). Knowledge-bases, places, spatial configurations and the performance of knowledge-intensive professional service firms. Journal of Economic Geography, 12(5), 969-1001. https://doi.org/10.1093/jeg/lbs015
Tödtling, F., Lehner, P., & Kaufmann, A. (2009). Do different types of innovation rely on specific kinds of knowledge interactions? Technovation, 29(1), 59-71. https://doi.org/10.1016/j.technovation.2008.05.002
Vega-Jurado, J., Gutiérrez-Gracia, A., & Fernández-de-Lucio, I. (2009). Does external knowledge sourcing matter for innovation? Evidence from the Spanish manufacturing industry. Industrial and Corporate Change, 18(4), 637-670. https://doi.org/10.1093/icc/dtp023
Vivas, C., & Barge-Gil, A. (2015). Impact on firms of the use of knowledge external sources: a systematic review of the literature. Journal of Economic Surveys, 29(5), 943-964. https://doi.org/10.1111/joes.12089
Zahra, S. A., & George, G. (2002). Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review, 27(2), 185-203. https://doi.org/10.5465/amr.2002.6587995