Abstract
AbstractBuilding on a problem‐solving perspective to value creation and capture, and on the business strategy literature, we argue that the actions that knowledge‐intensive business service (KIBS) firms take to identify, select and solve client problems will affect their approach to capturing value from innovation. We apply regression analysis to data from an original survey involving a sample of 230 innovations introduced by 150 publicly traded UK and US KIBS firms. Distinguishing between cost‐ and differentiation‐oriented KIBS firms, we find that cost‐oriented firms tend to place more importance on all appropriability mechanisms than do differentiation‐oriented firms. Furthermore, the perceived importance of formal appropriability mechanisms, relative to that of all appropriability mechanisms, tends to be higher for cost‐oriented than for differentiation‐oriented firms. This association is stronger for the case of the introduction of process (rather than product) innovation. These findings contribute to the strategy and service innovation literatures, by showing that KIBS firms’ competitive strategies influence value capture, over and above the role of the innovation‐, industry‐ and institutional‐level factors examined in earlier studies.
Highlights
The question of how firms create and capture value from developing new processes, products or services is central to the strategy and innovation literatures (Bowman and Ambrosini, 2000; The authors gratefully acknowledge helpful comments on earlier versions of the paper by Alan Hughes, Orietta Marsili, Silvia Massini, Mari Sako, Ammon Salter, Bruce Tether, the referees and audience at the British Academy of Management (BAM), R&D Management (RADMA), Strategic Management Society (SMS) and the Academy of Management (AOM) conferences
Taking a problemsolving perspective on value creation and capture (Nickerson and Zenger, 2004; Nickerson, Silverman and Zenger, 2007), we argue that the specific actions by Cost-oriented firms (COFs) and differentiation-oriented firms (DOFs) to select and solve client problems affect their approach to capturing value
This study advances our understanding of how knowledge-intensive business service (KIBS) firms capture value from innovation by exploring the role of these firms’ competitive strategy
Summary
The question of how firms create and capture value from developing new processes, products or services is central to the strategy and innovation literatures (Bowman and Ambrosini, 2000; The authors gratefully acknowledge helpful comments on earlier versions of the paper by Alan Hughes, Orietta Marsili, Silvia Massini, Mari Sako, Ammon Salter, Bruce Tether, the referees and audience at the British Academy of Management (BAM), R&D Management (RADMA), Strategic Management Society (SMS) and the Academy of Management (AOM) conferences The choice and perceived importance of these mechanisms has been shown to depend on such factors as: the nature of the innovation (product versus process), the type of sector, the capacity of firms to afford the cost of obtaining legal intellectual property (IP) rights, the ability of competitors to ‘invent around’ the innovation and the efficacy of legal IP protection (e.g. Cohen, Nelson and Walsh, 2000; Mansfield, 1986; Teece, 1986, 2006)
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