Kibs

Manchester Institute of Innovation Research


IME - Service Innovation - 2010 BMAN62052

MIIRO

Knowledge Intensive Business Services -

KIBSIan Miles

[email protected]

IME service innovation seminar 7




MIIRO Sets of Services

Whole EconomyIncluding nonservices – AFF,

extractive, construction, manufacturing, utilities

SERVICES

Business-related Services

KIBS

Business Services




MIIROKIBS – classic definition (1995)

As a first approach to a definition, we understand KIBS to be services that:Rely heavily upon professional knowledge. Thus, their employment structures are heavily weighted towards scientists, engineers, experts of all types. Many are practitioners of technology and technical change, Whatever their technological or professional specialism, they will also tend to be leading users of Information Technology to support their activities.Either supply products which are themselves primarily sources of information and knowledge to their users (e.g. measurements, reports, training, consultancy);Or use their knowledge to produce services which are intermediate inputs to their clients' own knowledge generating and information processing activities (e.g. communication and computer services). These client activities may be for internal use or supplied to yet other users in turn.Have as their main clients other businesses (including public services and the self-employed). Indeed, knowledge-intensive activities will frequently tend to be business-related, since as labour-intensive activities they will be relatively costly. (Educational and medical services demonstrate that delivery to final consumers often has to be mediated through collective service organisation.)

Miles et al (1995) at http://www.mbs.ac.uk/research/centres/engineering-policy/publications/reports.htm




MIIRO KIBS – EMCC (2005)As business services, KIBS are mainly concerned with providing knowledge-intensive inputs to the business processes of other organizations. These other organizations can, and often do, include public sector clients – KIBS do not only provide services to businesses. Knowledge-intensity is not easy to measure, but one convenient indicator is the shares of graduates in an industrial workforce. By this measure, KIBS are unusually high in terms of graduate-intensity. The graduates have been trained in different areas of knowledge: some specialize more in scientific and technological knowledge, others more in administrative, managerial or sociolegal affairs.

http://www.emcc.eurofound.eu.int/publications/2005/ef0559en.pdf




MIIROWhat services are KIBs?

Starting point: Business Service sectors: Most of NACE 72-74

NACE Classn Business Services Most important activities

71 71.1, .2Leasing & renting • Renting of transport, construction equipment, office machinery

72 72.1 – 6 Computer • Hardware consultancy • Software consultancy Data processing • Database activities

73 73.1, .2 R&D • Research and experimental development on natural sciences and engineering • …on social sciences and humanities

74 74.2,.3 Technical • Architectural activities • Engineering activities Technical testing and analysis

74.11- .12, 74.14 Professional • Legal activities • Accounting & tax consultancy

Management consulting

74.13, 74.4 Marketing • Market research • Advertising

74.5 Labour recruitment • Labour recruitment and provision of personnel

74.6, 74.7 Operational • Security activities • Industrial cleaning

74.81-84 Other • Secretarial and translation activities • Photography Packing activities • Fairs & exhibitions




MIIRO A few KIBS are elsewhere

Services to specific sectorsSome parts of section M (training), N (veterinary), and O (Other community, social and personal service activities): NACE Rev 1

91.1 Activities of business, employers’ and professional organizations92.1 Motion picture and video activities 921x92.11 Motion picture and video production 9211x92.12 Motion picture and video distribution 9211x92.13 Motion picture projection 921292.2 Radio and television activities 921x92.20 Radio and television activities92.31 Artistic and literary creation and interpretation (includes Technical Writing!)92.40 News agency activities92.51 Library and archives activities




MIIRO

How important are these services? …share of economy….

Eurostat, 2007, European Business

15.5% EU employment; 14.5% VA




MIIRO

Relative Scale of various BS in the UK, 2000

0 10 20 30 40 50 60 70 VALUE ADDED bn euros

Rapid growth, across

industrial world




MIIRO

0%

10%

20%

30%

40%

50%

60%

70%

Low

Tec

h M

anuf

actu

ring

Pas

seng

er T

rans

port

Fre

ight

Tra

nspo

rt

Med

ium

Low

Tec

h M

anuf

actu

ring

Con

stru

ctio

n

Oth

er T

rans

port

Med

ium

Hig

h T

ech

Man

ufac

turin

g

Ext

ract

ion,

Util

ities

, Rec

yclin

g

Who

lesa

le

Ren

ting

and

Leas

ing

Hig

h T

ech

Man

ufac

turin

g

Ban

king

, Ins

uran

ce, P

rope

rty

Tra

ding

Tel

ecom

s &

oth

er IT

ser

vice

s

Lega

l / A

ccou

ntin

g

Pub

lish,

Tra

v/E

st A

g, M

kt R

es

Man

ager

ial /

Org

anis

atio

nal S

ervs

Arc

hite

ctur

e &

Eng

inee

ring

R&

D a

nd T

echn

ical

Tes

ting

Com

pute

r S

ervi

ces

Mean % Other Graduates

Mean % S&E Graduates

KIBS Graduate-Intensity

???

CIS3 data, UK

“technology-based KIBS”

"professional KIBS"




MIIROSo, why have KIBS grown? what do KIBS do?

Outsourcing.New knowledge demands.KIBS provide, or use, knowledge that clients lack (in sufficient quantity) But what sorts of knowledge and what sorts of uses?Answer – practically any knowledge, and a wide range of uses (later)!




MIIRO

Knowledge of internal characteristics and external

environments –

Competitors

Clients, Suppliers

Collaborators

Regulators

Financiers

Markets

Social & Institutional

Env

Natural & Physical

Env

Process Technology

Management

Organisational Structure/ Design

Routines

Techniques

Human Resources

Product Technology &

DesignHealth and Safety




MIIRO

Knowledge of internal characteristics and external

environments –

What’s the background?

What’s the problem?

What’s the solution?

How to effect it?

Putting it into practice

Knowledge applied to Problem solving:

• Support for self-diagnosis

• Diagnosis

• Prescription

• Configuration

• Implementation of Solutions




MIIRO

Universities Laboratories Governments Other KIBS Clients Suppliers etc.

Knowledge Intermediators

External (generic) knowledge resources *

Firm’s absorption of knowledge

KIBS synthesising and

translating generic

knowledge

Intelligence

Diagnosis

Prescription

(Configuration)

Implementation




MIIRO


Its an Interactive Process!


* including previous service encounters

Client’s knowledge and

experienced problem

KIBS fusing generic and local knowledge – and

creating new knowledge

through R&D etc

Intelligence

Diagnosis

Prescription

(Configuration)

Implementation

Preliminary Problem Formulation

Coproduction and Absorption of Solution




MIIRORelations with Clients are Central

Tordoir: Jobbing, Sparring, Sales P P Tordoir, 1996, The Professional Knowledge Economy: The Management and Integration of Professional Services in Business Organizations, Dordrecht, Kluwer Academic

Christian Schulz (2000)

“Environmental service-providers,

knowledge transfer, and the greening of

industry” paper given at IGU

Commission on the Organization of

Industrial Space Annual Residential

Conference: Industry, Knowledge

and Environment, Dongguan / China, 8-12 August 2000





Tordoir: Jobbing, Sparring, Sales P P Tordoir, 1996, The Professional Knowledge Economy: The Management and Integration of Professional Services in Business Organizations, Dordrecht, Kluwer Academic

Gallouj: Client Roles and Strategies in Managing Relationship – esp. selecting KIBS/specifying services C Gallouj, 1997, “Asymmetry of information and the service relationship: selection and evaluation of the service provider”, International Journal of Service Industry Management, Vol. 8 No. 1, 1997, pp. 42-64.

Bettencourt: role responsibilities for clients effective coproduction

communication openness, shared problem solving, tolerance, accommodation, advocacy, involvement in project governancepersonal dedication Bettencourt et al, 2002, “Client Co-Production in Knowledge-Intensive Business Services” California Management Review, Vol. 44, Issue 4





Client

Problem formulation

Agreement on shared problem definition

Interaction around features of problem

Delivery of solution

Implementation of solution

Reaction to client’s formulation of problem

Agreement on shared problem definition

Interaction around features of problem

Formulation of solution

Delivery of solution

Ongoing support – “afterservice”

Information interchanges

Service Firm




MIIRO KIBS Professional Workers

Retention

Motivation and Governance

Collaboration

Knowledge Exchange and CaptureGood source: Dawson, R., 1999, Developing Knowledge-Based Client Relationships: The Future of Professional Services, Boston: Butterworth-Heinemann




MIIRO

Work Experience

across Sectors




MIIRO

Work Experience

across Sectors




MIIRO

0 10 20 30 40 50 60

Manufacturing

Business Services

Research and Development

Computer and Related

Real Estate and Renting of Mach.

Financial Intermediation

Transport and Communication

Hotels and Restaurants

Retail Trade

Wholesale Trade and Repair

0 10 20 30 40 50 60

Manufacturing

Business Services







Retail Trade


Manufactured product Service Product(good) (service)

KIBS are often particularlyinnovative - UK CIS4 dataUK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on

Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA

Product Innovation




MIIRO

0 10 20 30 40 50 60

Manufacturing

Business Services







Retail Trade


KIBS are often particularlyinnovative 2 - UK CIS4 dataUK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on


Process Innovation




MIIRO

0 5 10 15 20 25 30 35 40 45 50

Manufacturing

Business Services







Retail Trade


Novel Process Innovation Novel Product Innovation

KIBS are often particularlyinnovative 4 - UK CIS4 dataUK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on


NOVEL Innovation: new to market or industry




MIIRO

UK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA

0 5,000 10,000 15,000 20,000 25,000

Manufacturing

Business Services







Retail Trade


Intramural R&D Expenditure p.e. Extramural R&D Expenditure p.e.

Machinery, Equip. and Soft. Exp. p.e. Expenditure on External Knowledge p.e.

Training Expenditure p.e. Design Expenditure p.e.

Marketing Expenditure p.e. Innovation Expenditure per employee

KIBS are often particularlyinnovative 5 - UK CIS4 data




MIIRO

0 10 20 30 40 50 60 70 80 90 100

Manufacturing

Business Services







Retail Trade


Intramural R&D Expenditure Extramural R&D Expenditure Machinery, Equip. and Soft. Exp.

Expenditure on External Knowledge Training Expenditure Design Expenditure

Marketing Expenditure

Structure of Innovation Spend in Services

UK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on Regional Innovation, Cambridge-MIT Institute 2008 report to NESTA

Innovation Expenditure




MIIRO

0 10 20 30 40 50 60 70 80 90 100

Manufacturing

Business Services







Retail Trade





Business ServicesUK CIS4 data: “Understanding Hidden Innovation: Services in the UK “ Programme on


Innovation Expenditure

0 10 20 30 40 50 60 70 80 90 100

Miscellaneous

Industrial Cleaning

Investigation and Security

Labour Recruitment

Advertising

Technical Testing and Analysis

Architectural and Engineering

Legal, Accounting and Management







MIIRO

Effecting Innovation 1

KIBS InnovationData production, processing, knowledge generation, generalisation, synthesis methods; presentation tools; specific technologies and techniques for problem area...

Client InnovationReduced risks, accelerated learning, new ideas,

training, freer resources, focus on core problems

Coproduction of InnovationInteractive learning about problems and

potential solutions; new market opportunities




MIIRO


Its an Interactive Process!


* including previous service encounters

Client’s knowledge and

experienced problem

KIBS fusing generic and local knowledge – and

creating new knowledge

through R&D etc

Intelligence

Diagnosis

Prescription

(Configuration)

Implementation

Preliminary Problem Formulation





MIIRO Interactive Innovation

External (generic) knowledge resources

Firm’s experience of problem

KIBS fusing generic and local

knowledgePreliminary Problem Formulation


Intelligence

Diagnosis

Prescription

Configuration

Implementation

Knowledge of environments & technologies; scientific & engineering principles; innovation-relevant market

conditions, regulations, laws

Better understanding of problem, ways of measuring and monitoring

Reduced risk in defining solution; introduction of new types of solution

Easier learning and application of experience in combining processes

Saving resources that can be applied to core products, processes - & other

goals




MIIRO Swedish KIBS Survey (Nählinder)

1000 KIBS firms

(Higher for less standardised services)

(All higher for more innovative firms)




MIIRO UK environmental services

100 firms, 1995

Orientation to technology




MIIRO Hipp - German Survey

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Tra

de

Tra

nsp

. &

Co

mm

.

Ba

nkin

g / In

s.

Oth

er

Fin

an

cia

l

Se

rs.

So

ftw

are

Sci. &

Te

ch

.

Se

rs.

Oth

er

Bu

s. S

ers

.

Specialised

Intermediate

Standardised

Services vary in standardisation… some more designed for

clients… especially in

KIBS

Surprisingly low specialisation – may depend on question – cf Nahlinder




MIIRO Hipp - German Survey

Half the innovating service firms thought their innovations positively impacted client performance/productivity – 16% “very important” productivity, 13% performance. Fewer for the firms supplying standardised solutions - 1/34/5 of software firms thought this (as opposed to only 2/5 financial firms, for instance)Service innovation>organisational innovation (but this can have an impact too)




MIIRO

But what is the User’s View ? PWC study of consultants’clients 2006

180 clients, large range of consultancy

services

http://www.wwyltc.com/Ensuring-sustainable-value-from-consultants.pdf




MIIROThe User’s View ? PWC study of consultants’clients, 2006

180 clients, large range of consultancy

services




MIIRO User’s View of Benefits – PWC 2006




MIIRO 2010 MCA studyhttp://www.mca.org.uk/value-consulting

Management consulting




MIIROMain conclusions on the industry




MIIRO Main conclusions on users




MIIRO

Muller and Zenker– KIBS & SMEs

Muller E, & A Zenker (2001) "Business services as actors of knowledge transformation: the role of KIBS in regional and national innovation systems" Research Policy vol 30 no 9 pp 1501-1516.




MIIROBS and their users’ performance – Value added

ECORYS analysis of EU15 data




MIIRO

BS and their users’ performance – employment and productivity more complicated!

ECORYS analysis of EU15 data

0

1

2

3

4

5

6

1990-95 1995-2000 1990-2000

Labour Productivity

Growth in

BS

High71 (renting)

High72 (computer)

High73 (R&D)

High74 (other)

Intermediate

Low

All Sectors




MIIRO Who are the Users?

0

5

10

15

20

25

30

Pos

t an

dT

elec

om

Agr

icul

ture

and

Min

ing

Util

ities

Tra

nspo

rt a

ndS

tora

ge

Rea

l Est

ate

Con

stru

ctio

n

Fin

ance

and

Insu

ranc

e

Tra

de a

ndH

otel

s

Pub

lic S

ecto

r

Bus

ines

sS

ervi

ces

Man

ufac

turin

g

0

0.5

1

1.5

2

2.5

3sector share

relative to sector output

Input Output data Various

EU countries, c1995

Intensive users

Major markets




MIIRO Survey of Swedish KIBS

0

100

200

300

400

500

600

700

800

900

S M P HServices Manufacturing Public Sector Households

Ranking of users

First Second Third

Fourth




MIIRO Who are the Users? UK 1995

UK - Business Services mainly supporting other services

Computer R&D Other bus. services services services




MIIRO Who are the Users? France 1995

France - Business Services mainly supporting other services, except R&D services Computer R&D Other bus.

services services services




MIIROTop Ten Users- R&D Services UK

c1995

85% of output

goes to top 20

- 9 are services,

many public




MIIROImplications for Innovation

Apart from freeing up resources, & being dispensable…

KIBS are specialists - in acquiring, possessing and communicating knowledge. Alternative to labour mobility.

Able to draw on generalised knowledge from other firms and sectors. FUSION – and some creation of knowledge

Less wedded to heritage, organisational rigidities, factions

But… how far do they really help clients move in new directions? (E.g. : what role in move to cleaner technology?)




MIIROSome implications – practical issues and research questions

“ Absorption capacity” – what capabilities and practices clients need to effectively select KIBS, define problems, use solutions?“Organisational amnesia” – how can they cope with loss of memory when activities outsourced? Knowledge management (a) capture of new learning; (b) across organisational boundaries; (c) across professions?Standard solutions vs. sensitivity to organisational culture, national circumstances, etc.Professionalism: avoidance of “capture”, of collusion with clients and/or suppliers, of conflicts of interestMethods for maintaining and demonstrating quality control, addressing information asymmetriesRetention and motivation of experts

Client side

KIBS side




MIIROKIBS’ importance recognised

Important innovators

Important sources and “intermediaries” of knowledge

Growing (still?)

Limited knowledge about how different KIBS interact with clients and each other (in projects), about conditions and criteria for successful collaboration – what sorts of impact and innovation? What management lessons? What policy issues?




MIIRO

End of Presentation

Date post:	27-Jan-2015
Category:	Business
Upload:	ian-miles
View:	121 times
Download:	5 times