Innovation, performance and clients' collaboration in KIBS

What is it about?

In this paper we look at how customization and collaboration jointly affect the impact of innovation over firms’ performance asking till what extent and how should firms collaborate with clients and customize their services. Our results show that innovation fosters growth but most growing KIBS firms are not those with the highest service customization and collaboration with clients. Most growing firms develop mass customization strategies and rely on focused collaboration strategies with clients.

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Why is it important?

The paper shows that diverse combinations of innovation patterns (i.e. innovation content and timing of entry), service types and breadth of relationships with customers are variously associated with growth in KIBS firms. Also our study offers managerial insights for practitioners. Since innovations show different effects on growth, our results imply that not all innovations are equally beneficial to a firm’s performance. Thus, managers should carefully evaluate the requests of their clients implying the introduction of new products or new processes and the corresponding needs associated with customer-supplier links.