Services & Innovation in Services Professor Bruce Tether

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(My publications in this area)

Services increasingly dominate economic activity in the developed world. In Europe they account for two thirds of value added and employment. In the US they are even more significant, accounting for about three-quarters of value added and employment. Yet almost all of our understanding of innovation and innovation processes at the firm level has been derived from studies of manufacturing and the production of tangible goods.

The UK Economy according to the Office for National Statistics

This raises questions about the adequacy of a manufacturing based understanding of innovation in a service dominated world. Research suggests that innovation processes in services have significant differences to those in manufacturing. In particular, amongst the 'peculiarities of services' commonly recalled in the literature are: the close interaction between production and consumption; the intangible nature of service outputs; the key role of human resources in service provision; the critical role of organisational factors in firm's performance; and the weakness of intellectual property protection in services. All of these are thought to affect the pattern of innovation in services.

But services are also highly differentiated, with significant differences in the behaviour of firms in different sub-sectors (e.g., transport services vs. financial services vs. engineering services). We need better taxonomies and other conceptual devices to understand this diversity. One way of thinking about services is to see them as undertaking different types of transformation activities – physical transformations, such as moving goods or people; transformations of information – such as data processing; transformations of people – such as health or educational services; and transformations of knowledge – such as knowledge generating services, including R&D. Unpacking services helps us understand their dynamics, but there is also significant intra-sectoral variation, which also needs further investigation.

I am investigating services and service innovation in a variety of ways. I have undertaken several analyses of large data-sets to investigate patterns of innovation amongst service firms. These studies include analyses of the 1995 survey of German service firms, and of the response of service firms to the second European Community Innovation Survey (CIS II - which was carried out in 1997), as well as more recent work on the UK version of the third Community Innovation Survey and a study for the European Commission on the extent and patterns of innovation in services. I have also undertaken more detailed research, notably on airports and innovation in air traffic management (see my 'system of innovation' page for more details). Amongst the users of my research are the European Commission and European Patent Office, which is engaged in a change process to make it more dynamic and responsive to users needs.

Publications

Reports and papers that I have written in relation to innovation in services include the following:

B. S. Tether and J. S. Metcalfe (2004) ‘Systems of Innovation in Services’, in F. Malerba (ed.) Sectoral Systems of Innovation, Cambridge University Press, Cambridge, UK

J. R. L. Howells and B. S. Tether (project coordinators) (2004) Innovation in Services: Issues at Stake and Trends – A Report for the European Commission

C. Hipp, B. S. Tether, and I. Miles (2003), ‘Effects of Innovation in Standardised, Customised and Bespoke Services; Evidence from Germany’, in J. Tidd and Frank M. Hull (eds.) Service Innovation: Organisational Responses to Technological Opportunities and Market Imperatives, Imperial College Press, London.

B. S. Tether (2003) ‘The Sources and Aims of Innovation in Services: Variety Between and Within Sectors’, Economics of Innovation and New Technology, 12.6, 481-505

B. S. Tether and J. S. Metcalfe (2003) ‘Horndal at Heathrow?: Capacity Expansion through Co-operation and System Evolution’, Industrial and Corporate Change, 12.3, 437-476.

I. D. Miles and B. S. Tether (2003) ‘Innovation in the Service Economy’, IPTS Report, No. 71, February.

B. S. Tether, I. Miles, K. Blind, C. Hipp, N. de Liso and G. Cainelli (2001), Innovation in Services - An Analysis of CIS-2 data on Innovation in the Service Sector, A report for the European Commission (under CIS Contract 98/184).

B. S. Tether and C. Hipp (in press - 2002), 'Knowledge Intensive, Technical and Other Services: Patterns of Competitiveness and Innovation',Technology Analysis and Strategic Management, 14.2, 163 – 182.

B. S. Tether and I. Miles (2001), 'Surveying Innovation in Services: Measurement and Policy Interpretation Issues' in B. Thuriaux, E. Arnold and C. Couchot (eds.) Innovation and Enterprise Creation: Statistics and Indicators, Innovation Papers No. 18, DG Enterprise, European Commission, Luxembourg.
(The paper is also available at: http://www.cordis.lu/innovation-smes/src/statconf5.htm)

B. S. Tether, C. Hipp and I. Miles (2001), 'Standardization and Particularization in Services; Evidence from Germany', Research Policy, 30, pp.1115-1138 (available as CRIC Discussion Paper No. 30).

C. Hipp, B. S. Tether, and I. Miles (2000), 'The Incidence and Effects of Innovation in Services; Evidence from Germany', International Journal of Innovation Management, 4.4, 417-454.

B. S. Tether and C. Hipp (2000), 'Competition and Innovation amongst Knowledge Intensive and Other Service Firms: Evidence from Germany', in B. Andersen, J. Howells, R. Hull, I. Miles and J. Roberts (eds) Knowledge and Innovation in the New Service Economy, Edward Elgar.

Email: Bruce.Tether[a]mbs.ac.uk