Knowledge, Openness, Innovation And Growth In UK Business Services
The authors explore the causal links between service firms' knowledge investments, their innovation outputs and business growth based on a bespoke survey of around 1100 UK service businesses. They combine the activity based approach of the innovation value chain with firms' external links at each stage of the innovation process. This introduces the notion of 'Encoding' relationships through which learning improves the effectiveness of firms' innovation processes. The econometric results emphasize the importance of openness in the initial, exploratory phase of the innovation process and the significance of team-working in later stages of the process.