Recognition for specialist firms as innovation catalysts

Knowledge intensive business services (KIBS) catalyse innovation within wider systems. We were the first to recognise their importance - and ensure their due consideration in national and international innovation policy development.

Our work highlighted the role of KIBS as important agents within systems of innovation, both as innovators and as innovation catalysts. Professor Ian Miles was the first to recognise KIBS as key producers, distributors and users of new knowledge.

Although slightly different terminology is sometimes used, the significance of KIBS as innovators, and as influential actors in ‘systems of innovation’ is increasingly acknowledged by governments, the international bodies, such as the OECD, and incorporated into policy.

Key policies incorporating KIBS:

  • European Commission Staff Working Document on ‘Challenges for EU support to innovation in services’
  • European Commission’s ‘Sectoral Innovation Watch;’ studies (2008-2010), which considered KIBS as an industry sector alongside automotive, biotechnology, electrical/optical equipment and aerospace
  • The European Union’s “European Competitiveness Report 2011”, including extensive discussion on KIBS and their significance
  • OECD Innovation Strategy (2010)
  • Preparation of the OECD 2015-2016 Programme of Work and Budget, in which the work of Professor Miles is shaping discourse on the role of service industries, and innovation in these industries
  • Innovation policies of national governments in Norway, Sweden and Finland
  • Introduction of the ‘Innovation with Services’ programme in Germany in 2008, since renewed with around EUR 70 million funding over the next five years
  • Department for Business Innovation and Skills (BIS) industrial strategy, framed around three key sectors, including ‘knowledge intensive traded services
  • BIS publication of ‘Growth is Our Business: A Strategy for Professional and Business Services’ (2013), the culmination of six years of effort to place KIBS at the heart of industrial strategy.

Our research

In the 1990s Professor Ian Miles identified the significance for innovation of a particular set of service firms he termed “KIBS”.

The article led to a European Commission contract to further develop the concept, which Professor Miles undertook with Manchester and Dutch colleagues. Their study recognised for the first time that not only were some service industries especially knowledge-intensive and highly innovative, but that they also act as innovation intermediaries for their clients.

Key findings:

  • KIBS make a direct contribution to growth by providing generally high quality employment, export earnings and innovation
  • KIBS contribute indirectly through their interactions with client sectors, and particularly how they help client firms to innovate within systems of innovation
  • On-going research has examined the extent to which KIBS interact with other sectors of the economy, their role as intermediaries in innovation and their mechanisms for sourcing knowledge from consultants.