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Knowledge Intensive Services' Suppliers and Clients

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51<br />

Leiponen (2002) raises an additional question: what are the consequences of<br />

different ways of managing knowledge across the supplier-client interface? He<br />

explores the relations between allocation of control rights over intellectual assets<br />

between a business service supplier <strong>and</strong> its client, on the one h<strong>and</strong>, <strong>and</strong> innovation<br />

outcomes on the other. A major conclusion is that KIBS suppliers who retain<br />

control of their own intellectual output are liable to be more innovative. Thus<br />

that business service firms seem more likely to be innovative if their internal<br />

knowledge resources are controlled organisationally, or collectively, as opposed to<br />

being controlled by individual experts. Why might this be? One factor may be the<br />

increased scope for diffusion of knowledge, <strong>and</strong> for bringing together <strong>and</strong><br />

synthesising different knowledges, within the firm; another might be that where<br />

there is organisational control of knowledge, there is liable to be more support for<br />

investment in R&D <strong>and</strong> other innovation-oriented activities. Another conclusion<br />

concerns the role of KIBS clients. Especially when they are in long term<br />

relationships with the service supplier, client firms will need to steer a careful path.<br />

They may well want to control outsourced service activities, <strong>and</strong> the intellectual<br />

property resulting from these; but they will lose out if such controls are so intense as<br />

to reduce the KIBS’ incentives to invest in learning <strong>and</strong> innovation.<br />

<strong>Clients</strong> can be important for KIBS internal processes <strong>and</strong> knowledge bases. Thus<br />

Muller & Zenker (2001) <strong>and</strong> Strambach (2001) b6th suggest that KIBS firms can<br />

develop their own knowledge base <strong>and</strong> innovation capability through interaction<br />

with clients in various ways.The interaction may pose new technical problems that<br />

require solutions, may involve sharing knowledge about these problems, may link<br />

KIBS to sectoral innovation systems <strong>and</strong> other innovative firms, etc.<br />

One source of information as to the influence of client interactions on KIBS comes<br />

from Tether’s (2001) of the CIS-2 survey data for the EU. Table 6 sets out some of<br />

the results he presents. First, the data confirm that the technology-oriented KIBS<br />

(technical <strong>and</strong> computer services in particular, followed by financial services) are<br />

more innovative than the other services sectors studied. Second, we can examine<br />

the firms’ ranking of the importance of various ‘sources of information’ – in Table<br />

6 these sources are ranked in order of with the proportion of firms that indicated<br />

they were ‘very important’ (<strong>and</strong> the data also display the proportion that indicated<br />

that the source was at least ‘relevant’). Third, we also have data on whom the firms<br />

collaborate with in innovation projects.<br />

‘Sources within the firm’ itself emerge as the most cited source of information for<br />

innovation. Amongst the various external sources of information for innovation,<br />

the most widely identified as being both relevant <strong>and</strong> very important were<br />

customers (or clients): this is most striking for computer services KIBS. Apart from

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