Knowledge-intensive Services Research Articles

Digital servitization strategies and business model innovation: The role of knowledge-intensive business services

Several studies on digital servitization strategies highlight that their implementation is closely associated with some form of business model innovation. In order to engage in these innovation projects, firms need to expand their internal knowledge and skills while leveraging external organizations that support them in their servitization journey. To date, little is known about the intra-organizational factors accounting for the activation of new relationships with such knowledge-intensive service providers. This paper adopts a configurational approach for investigating the role of knowledge-intensive relationships in digital servitization strategies. Findings are founded on a multi-method investigation based on a structured survey and semi-structured interviews to Italian B2B manufacturers. The study contributes to the digital servitization literature showing the conditions that lead firms to develop relationships with different types of external providers of knowledge-intensive services, highlighting the role of firm’s size, digital readiness, internal commitment, and specific hiring programs in digital servitization paths.

How do knowledge-intensive business services improve innovation? A resource-based model for antecedents of innovation in a developing country

Purpose Firms strive to find new ways of boosting value creation through integrating knowledge for innovation. Open innovation has altered this quest for excellence and, accordingly, this study aims to investigate the antecedents and enablers of innovation performance in firms belonging to a knowledge-intensive service sector of a developing country. Design/methodology/approach As such, data were gathered through a survey approach, targeting telecom service firms in Pakistan. Hypotheses were tested using the partial least squares technique. Measurement and structural models were assessed following the recommended two-stage procedure. Findings Results showed that knowledge sourcing and customer engagement impact the innovation performance of firms, whereas transformational leadership, knowledge sourcing and customer engagement are linked to innovation with the mediating effect of absorptive capacity. Practical implications This research helps to improve the innovation management practices of the firms belonging to this important sector and thus enables them to achieve sustainable competitive advantage through building their absorptive capabilities. Originality/value Knowledge-intensive business services are largely excluded from the great debate on open innovation so far, with a few exceptions. This research proposes and tests a model of enablers of open innovation that contributes toward improving the innovation performance of telecom firms in a developing country.

Macroeconomic determinants of enterprise births in European countries: The moderating role of human capital in the unemployment structure

Research background: While micro-level studies evidence that unemployment increases the probability of being self-employed, the findings at the macro-scale are ambiguous. At the macroscale, the unemployment push mechanism is further conditioned by cyclical fluctuations and industry-specific characteristics. Most studies, however, have neglected the heterogeneity of the group of unemployed, which could also be behind the disparate results. Purpose of the article: In filling this gap, the study aims to examine the links between the unemployment rate and enterprise births, while considering the unemployment structure in terms of the human capital of the unemployed and the unemployment duration. Methods: The issue is examined using the example of 20 European countries in the period 2004–2020. The fixed- and random-effects panel models were applied. The sectoral diversity of entrepreneurial activity (manufacturing, wholesaling and retailing, professional and scientific activities, ICT), and the size class of the newly established enterprises (with/without employees) are also considered. Findings & value added: The study reveals that the share of long-term unemployment and the skill structure of the unemployed have an impact on new firm formation, which varies with the knowledge intensity of the start-ups and their size. A higher share of highly qualified unemployed increases the start-up rates, particularly in knowledge-intensive services and manufacturing. A higher share of long-term unemployed has a negative impact on enterprise births, specifically in new businesses with employees. The findings are important for designing effective instruments to address unemployment by entrepreneurship within active labour market policy.

An intersectional perspective on the impacts and responses of entrepreneurs during the COVID-19 pandemic in Germany

In the wake of the COVID-19 pandemic, research is swiftly progressing to comprehend the impact on solo self-employed individuals and microenterprises. Although there is unanimous agreement within the literature that this unprecedented event has profoundly affected businesses globally, evidence regarding these impacts’ precise direction and extent remains inconclusive. A limited understanding exists concerning the various intersecting factors influencing entrepreneurs’ affectedness and coping strategies. This article employs qualitative interview data to examine how entrepreneurs from knowledge-intensive services and retail and hospitality sectors in Germany experienced, navigated and responded to the multifaceted challenges posed by the COVID-19 pandemic. Results reveal that factors at the intersection of sector affiliation, gender, migrant background and care/parental responsibilities determine entrepreneurs’ affectedness and shape their coping strategies, including using state aid programmes. Highlighting distinct combinations of intersecting factors, we contribute to advancing the ongoing scholarly discourse on crisis dynamics and intersectionality in entrepreneurship and policymaking.

Servant leadership and employee innovative behaviour: Unpacking the role of support for innovation and creative self-efficacy in knowledge intensive service context

Employee innovative behaviour is widely emphasized as a critical driver of organizational innovation. Drawing on social information processing theory, this research proposes that by exhibiting servant leadership style, organizational managers can stimulate employee innovative behaviour directly and through the mechanism of support for innovation. This study also anticipates that the role of of employees’ creative self-efficacy in strengthening the influence of support for innovation on innovative behaviour. To test the proposed relationships, data is collected from 338 IT professionals working in twelve large-sized IT-based service organizations of Pakistan. The results surfaced from PLS-SEM analysis indicate strong support for direct and positive linkage between servant leadership and innovative behaviour and significant role of support for innovation in mediating this relationship. However, the accentuating role of creative self-effecacy is not supported. This study extends existing knowledge concerning the nexus between servant leadership and innovation by examining the mechanism of support for innivation by which servant leadership can augment employee innovative behaviour. Findings of this research entails vital implications for service organizations striving for superior innovation performance. Furthermore, some contradictory findings of this research call for further empirical investigation for more finegrained managerial implications.

FUNCTIONING OF BUSINESS ENTITIES IN UKRAINE IN THE CONTEXT OF PERFORMING SCIENTIFIC ACTIVITIES AND PROVIDING SCIENTIFIC SERVICES

The article analyzes the peculiarities of the functioning of economic entities in Ukraine in the context of the implementation of knowledge-intensive activities and the provision of knowledge-intensive services, which allows to substantiate the essence of the innovation process as the main factor in the development of modern production. The domestic statistical materials were used, in particular the Classification of types of economic activity from 2010, as well as indicators of business entities, grouped according to special aggregations provided for in Regulation (of the European Union - hereinafter EU) № 2020 / 1197 of 30.07.2020 regarding structural statistics of enterprises in 2010-2022 with the aim of forming approaches to the use of the concepts «science-intensive activity» and «science-intensive services». The expediency of dividing knowledge-intensive services into such types as knowledge-intensive high-tech services, knowledge-intensive market services, knowledge-intensive financial services and other knowledge-intensive services is substantiated, which made it possible to reveal the relationship between knowledge-intensive services and knowledge-intensive scientific activities in general, as well as in the business industry in particular. A correlation-regression analysis of the influence of knowledge-intensive services on knowledge-intensive activities in Ukraine, including knowledge-intensive activities in the business industry, was carried out, which allowed to reveal a high density of communication, and the growing straight-line function indicates the need to increase the provision of knowledge-intensive services for the growth of knowledge-intensive activities. Based on the analysis of the normative legal acts, the given laws of Ukraine regulating the use of knowledge-intensive services determine the directions of their implementation in the context of compliance with existing processes and connection with the types of knowledge-intensive activities. The method of analyzing the operating environment was used in order to identify the efficiency between types of knowledge-intensive services and knowledge-intensive activities, which made it possible to justify the need to increase the volume of knowledge-intensive market services, other knowledge-intensive services, knowledge-intensive activities and business industry.

Service Activity and Patented Innovation in Manufacturing Firms

Noting the significant shift in the manufacturing sector towards services in recent decades, this study examines the potential of service operations as a source of customer insight. We study whether regular customer exposure during service operations can drive commercially significant and patentable innovation. Furthermore, we highlight the underexplored heterogeneity in the knowledge-generating potential of service activities. Using the media richness theory, we argue that more contact-intensive, knowledge-intensive, or focused services can provide richer customer information. By analyzing data from 8,087 unique manufacturing firms and 1,546,216 patents over a 30-year timeframe, we find that a higher level of service activity results in a higher level of patented innovation, which is stronger for contact-intensive and knowledge-intensive services. Post hoc analyses reveal that such innovations tend to be more radical in nature and depart from the firm's historical innovation patterns. Our study offers a critical managerial insight that, to maximize their innovation potential, manufacturers should expand into high-contact, knowledge-intensive services and treat their service operations as strategic market intelligence media.

Embodied emissions policies—design options and political mobilization potential

Abstract The topic of greenhouse gas emissions embodied in products is gaining in prominence and the possibilities for measuring and verifying them are improving. This provides fertile ground for those who demand that climate policy should address such embodied emissions. There are different design options for policies targeting embodied emissions. Such differences affect which groups can be mobilized in their favour. This paper shows that procurement standards which target intermediate products can mobilize the support of relatively low carbon producers of high carbon materials, while product standards which target final products can mobilize the support of producers of relatively low carbon materials and knowledge-intensive service providers.

Service sector firm death and productivity in urban and rural locations

While the positive impact of firm productivity on survival is well documented, limited evidence exists on geographic variations of this relationship and on services industries. We show that in knowledge intensive services, this relationship is more strongly moderated in core urban areas compared to suburban and rural areas.

The influence of knowledge-intensive service industry agglomeration in the Yangtze River Delta urban agglomeration on regional economy

Knowledge-intensive service industry has become an important part of social economy, which not only promotes the innovation of modern service industry, but also promotes the upgrading and transformation of manufacturing industry. The agglomeration of knowledge-intensive service industry is not only the inevitable result of economic growth, but also the premise of sustained economic growth. Moreover, China's national economy is transforming from an industrialized economy to a service-oriented and knowledge-based economy, and the importance of knowledge-intensive service industry is increasing day by day. This paper constructs a theoretical framework of the influence of population agglomeration on the economic development of urban agglomerations. The article holds that population agglomeration promotes the economic development of urban agglomerations through the upgrading of industrial structure and the promotion of human capital. In the future, we need to focus on the similarities and differences between population agglomeration and economic development of urban agglomerations in central China, explore the factors of economic development of urban agglomerations, and provide reasonable suggestions for the government to formulate relevant economic policies. This paper, from an innovative research perspective, based on the perspective of population agglomeration, studies the path of its role in regional economic development, which can make up for this defect to some extent. Moreover, the research object has been innovated and the research method has been improved. On the basis of the above, the panel data of the Yangtze River Delta from 2012 to 2021 is selected as the research sample, the location entropy index is taken as the explanatory variable, the regional gross domestic product (GDP) is taken as the explanatory variable, and the rationality of economic theory and the significance of econometric test are considered. Finally, the data are analyzed and tested by regression. The empirical analysis of the Yangtze River Delta urban agglomeration proves the importance of knowledge-intensive service industry agglomeration to regional economic development. Finally, based on the contribution of knowledge-intensive service industry agglomeration to regional economy, the development of knowledge-intensive service industry and the promotion of industrial agglomeration are studied.

Driving forces behind service innovation in knowledge-intensive services with different knowledge bases

Purpose The purpose of this paper is to identify and describe the influence of the knowledge base (KB) of the company on driving forces of innovation processes in knowledge-intensive services (KIS) and to compare the level of innovativeness of the final services. Design/methodology/approach The paper investigates through qualitative research 11 KIS organisations with different KB. Findings The research results identified and described the influence of the KB on driving forces of innovations processes and its results in companies with four newly identified KBs (analytical, synthetic, symbolic and compliance). Research limitations/implications Further research, based on a larger number of companies, is needed to confirm the results of this research and to complement the effect of the KB on driving forces of innovation. Practical implications This research can help organisations understand how to develop strategic plans and new ideas for innovative services depending on the KB of the organisation. Social implications The description of successful innovation processes and results in several leading companies presented in the study may help other companies in identifying knowledge-integration practices to improve performance and innovation processes that support multiplicity, productivity and creativity. Originality/value The study systemised the sources of new ideas for innovation in companies with different KB, several driving forces of innovation were identified and how these forces are affected by each KB; lastly, innovation results were compared in companies with different KB.

Mega-urbanization, territorial fragmentation and social inequality in the Global South: The case of Mexico city and its city-region

City-regions have become the new dominant form of urbanization in both developed and developing countries, comprising a polycentric network of multiple cities of assorted sizes. However, urbanization does not occur uniformly within the city-region, creating several types of territorial inequalities. This study argues that there is a lack of city-region studies in Latin America for analysing these internal inequalities, expressed, among other aspects, in fragmented land occupation, highly differentiated economic decentralisation, and marked social-urban-rural and urban-urban inequalities. The city-region territory represents a fragmented, divided territory in an urban-rural, social, and economic sense.The main findings of this study of Mexico City's city-region point to the fact that globalization dynamized the economic development of metropolitan zones and second-tier cities, yet that its effect on rural areas was limited. It has created a clear territorial distinction between its main urban and rural territories, with the latter effectively becoming poor regional peripheries. Economic advantages have favoured metropolitan areas through the decentralisation of manufacturing and knowledge-intensive services, excluding small cities and rural areas from this economic model. The last two are the clearest losers in this process since they are associated with places with the most obvious disadvantages and the most marked social inequalities. Rural areas have low productivity and incipient industrialisation, and expel the migrant population, whereas metropolitan peripheries have high levels of social marginalisation.

The B2B relationship in industrial companies from the position of hidden champions: knowledge-intensive services for small business

The B2B relationship in industrial companies from the position of hidden champions: knowledge-intensive services for small business

Konvergencija profitnih stopa u Evropskoj ekonomskoj oblasti - analiza panel podataka

This paper examines profitability disparities across the European economies using the aggregate and sectoral data for the period from 1995 to 2019 and applying a combination of panel unit root tests and the club convergence procedure. For most of the sectors, no convergence was identified at the aggregate level. Convergence within the clubs to multiple equilibrium levels, however, was identified. This convergence pattern was the most typical in the knowledge-intensive service sectors. The exogenous shocks had temporary effects on the economies' profit rates (thus contributing to convergence), whereas the country and sector-specific profitability components were characterized by stochastic behavior (attesting to nonconvergence). Overall, the persistence of profitability disparities was demonstrated. The findings suggest the importance of the firm-specific and local profitability drivers and the limited effects of the macroeconomic and competition policies on profit rates.

Exploring How the University Ecosystem Can Mobilise Resources for Social Innovation and Entrepreneurship: Knowledge-Intensive Entrepreneurial Firms in Sweden

Social innovation and entrepreneurship are argued to be crucial for enabling inclusive and sustainable transformation. However, we know less about how universities can enable social innovation and entrepreneurship amongst students and employees. This article explores one specific channel for university impact - supporting knowledge-intensive entrepreneurs (KIE) in delivering social innovation as services. We conduct a theoretically informed case study at the University of Gothenburg, Sweden, analysing one firm started by alumni and one firm started by employed researchers. We propose a conceptual framework, explicating how social KIE entrepreneurs mobilise resources from the university in knowledge-intensive services of social impact.

Crisis spreading in multinational firms’ network: the dual influence of local interactions

This study investigates the characteristics of multinational firm’s interactions within and across activity sectors and the impact of intra-urban connections, during crisis propagation. By employing data that reflect ownership relations aggregated on the city level, we constructed the partial-multiplex, directed network of cities, divided into five layers by activity sector. The network was examined in two states: one excluding intra-urban interactions and one including them. The difference between these two states highlight the significant role of intra-urban networking processes in the global economy. The five layers differ both structurally and in terms of vulnerability during crisis propagation. The Knowledge Intensive Services (KIS) layer is the densest and most populous layer of all and its firms are more likely to be owners than subsidiaries. Using a simple stochastic Susceptible-Infected-Recovered (SIR) model, we simulated a crisis diffusion on the network of cities. Our results revealed that in the absence of intra-urban connections, KIS was both the most vulnerable and most influential layer in crisis propagation. The inclusion of intra-urban links sets off a complex interplay of factors that affect diffusion outcomes in nuanced ways: while it generally enhances the impact of the crisis and the influence across layers becomes rather homogeneous it can also have a protective effect, in cases of very dense and well-connected layers, such as KIS.

Fintech and Knowledge-Intensive Services Agglomeration in China: Unearthing the U-Shaped Relationship

This study comprehensively examines the intricate relationship between advancements in Financial Technology and the agglomeration of knowledge-intensive services in 284 Chinese urban regions, spanning the years 2014–2020. Our empirical evidence uncovers a unique U-shaped association that remains unflinching in various robustness assessments. Notably, the analysis of heterogeneity divulges a more pronounced influence in larger and medium-sized cities compared to their smaller counterparts. Further, regions possessing sophisticated financial infrastructure experience a heightened impact. The study's nuanced understanding of this complex relationship offers valuable perspectives, aiding the precise formulation of policy interventions.

Estimation of sectoral maladjustments linked to the need for innovative transformation of the Ukrainian entrepreneurial sector

The importance of supporting and promoting entrepreneurship development is due to its positive impact on economic growth, innovation processes, and the population welfare, the ability to contribute to the solution of modern challenges. In Ukraine, the entrepreneurial sector – the totality of large, medium, small, and micro-enterprises that carry out entrepreneurial activities in the country – faces problems of premature deindustrialization, slowing down innovation processes and their consequences in the form of a structurally weak, resource-based economy, which are further exacerbated in wartime conditions, when the country suffers from huge destruction and losses. Solving these problems requires a deep economic restructuring – from raw materials to industrial-innovative economy – in which the entrepreneurial sector will play a key role. The article aims to assess sectoral maladjustments of the Ukrainian entrepreneurial sector related to the need for innovative transformation as a basis for economic restructuring in modern and post-war conditions. The assessment was performed based on a set of proposed scientific and methodological foundations using indicators reflecting the level of investment in innovation and proving the effectiveness of enterprises' innovative activities, as of the pre-war period, to further (if relevant statistical information is available) compare the obtained estimates with the structural characteristics of the entrepreneurial sector during the war and post-war periods. It has been established that there are sectoral maladjustments linked to enterprises' economic opportunities in the technological sectors of the manufacturing and high-tech knowledge-intensive services, when it comes to implementing innovative transformation. Sectoral maladjustments in the levels of technological intensity of the sold innovative products in the entrepreneurial sector have been identified. It has been revealed that there are sectoral maladjustments in the levels of the entrepreneurial sector innovative effectiveness by types of economic activities (TEA), which vary significantly by industries depending on their specifics, economic status and other conditions. A grouping of TEA according to the level of innovative effectiveness (IE) has been made. It has been revealed that most of them belong to the group with a low level of IE, which indicates the unbalanced investment and innovation development of the Ukrainian entrepreneurial sector. A comparative analysis of the entrepreneurial sectors of Ukraine, innovatively developed countries, and peer countries in terms of indicators characterizing the state of technology-intensive industries development showed that the national economy lags behind both groups of countries and the need for its restructuring in the direction of increasing the share of gross value added of the manufacturing of high-technology and medium-high-technology industries. This research forms a scientific basis for substantiating and including appropriate actions in state policies to create favorable conditions for the modern and post-war recovery of the Ukrainian economy on a fundamentally new, competitive and innovative, basis.

Convergence clubs and spatial structural change in the European Union

This article studies regional income convergence and its conditioning factors in 267 subnational regions of the European Union during the 2003–2016 period. Building on previous research that documents the formation of multiple convergence clubs in per-capita income, we study the role of structural change and spatial dependence as key conditioning factors of the club convergence process. Our results are threefold. First, we document that the spatial distribution of the convergence clubs shows a strong degree of spatial dependence. Second, when we study the evolution of structural change and spatial dependence, our results show that the share of manufacturing has been decreasing, while its degree of spatial dependence has been increasing over time. In contrast, the share of knowledge-intensive services has increased, while its degree of spatial dependence has decreased. Third, we evaluate the role of structural change and spatial dependence in the formation of convergence clubs using a spatial ordered-logit model. Our results show that when spatial dependence is omitted from the econometric specification, both manufacturing and knowledge-intensive services are not significant predictors of club convergence. Only when spatial dependence is added to the specification do most of the structural change variables become statistically significant. In addition, there are contrasting spatial effects between variables of structural change. The geographical spillover effects for manufacturing and routine services are statistically significant, while knowledge-intensive services do not exhibit such significant spillover effects. Overall, our results highlight the joint importance of structural change and spatial dependence in the formation of convergence clubs. Specifically, the notion of spatial structural change deserves further attention, as it appears to play a major role in the evolution of regional disparities in the European Union.

Intangible capital and financial leverage in SMEs

PurposeIntangible capital (IC) is an important factor for economic growth and firm performance. The role IC has played has become even more crucial in recent decades, possibly influencing debt capacity and default risk assessment. This paper studies how entrepreneurial and employee-based IC affects financial leverage.Design/methodology/approachEmployer–employee unbalanced panel data provided by Statistics Finland that refer to Finnish small and medium-sized enterprises (SMEs) are used. Intangibles are measured with an expenditure-based method. Employee-based IC and entrepreneurial knowledge are used to explain debt financing in SMEs.FindingsThe findings imply that IC-intensive firms have less debt capacity due to weak pledgeability and asymmetric information between borrower and lender. Entrepreneurs with managerial or financial knowledge increase the firm's debt capacity compared to other entrepreneurs, especially in knowledge-intensive services (KIS). One explanation is that the entrepreneurs are more competent in negotiating with lenders as the entrepreneurs possess better financial skills. Entrepreneurs with technical knowledge decrease the firm's debt capacity in all industries.Originality/valueWhile some earlier research focused on the IC–financial leverage relationship, hardly any study has looked at entrepreneurial IC. This paper provides new insights by including entrepreneurial IC alongside employee-based IC.