Innovation in Business Services: From Technological Adoption to Multiple, Complementary, Concurrent Changes

Services not only comprise a large part of the economy, but also represent the main sector of growth within advanced industrial economies (see Chapters 1 and 4). Despite this, relatively little is known about the underlying dynamics and nature of the service sector, as compared with other sectors — particularly manufacturing. In particular, little is known about the role of innovation in this process of dynamic change. Innovation in services is less well understood than innovation in manufacturing (OECD, 2005b). This study highlights the partial view that most studies have adopted in relation to understanding innovation, particularly in the services sector. Innovation studies have tended to overlook the fact that at any one time firms and organizations are typically generating, adopting and implementing multiple forms of innovation. This chapter therefore addresses these issues by exploring innovation processes using data from a survey which covered firms located across Europe and which were active in three business service sectors: road transport, information processing and design and related activities. The chapter also explores some of the behavioural aspects associated with innovation, such as how firms compete and their growth objectives.