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Productivity, Innovation and Knowledge in Services

New Economic and Socio-Economic Approaches

Edited by Jean Gadrey and Faïz Gallouj

Written by some of the most distinguished authors in the field, this book elucidates the critical and complex relationships between services, production and innovation. The authors discuss the limitations of current theories to explain service productivity and innovation, and call for a conceptual re-working of the ways in which these are measured. They also highlight the important role of knowledge in the production system and in doing so make an important contribution to a key debate which has emerged in the social sciences in recent years.
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Chapter 11: Knowledge-intensive Business Services: Processing Knowledge and Producing Innovation

Faïz Gallouj


11. Knowledge-intensive business services: processing knowledge and producing innovation Faïz Gallouj INTRODUCTION Services constitute a challenge to economic theory, both conceptually and methodologically. It is not always easy, indeed, to define the outputs of service activities. They are often indissociable from the process by which they are produced and have to be considered within different time frames: that in which the service itself is produced and that in which the effect of the service makes itself felt. As a result, it is difficult to define innovation, evaluate performance and analyse markets.1 In knowledge-intensive business services (KIBS), that is research, consultancy and engineering business services, these difficulties are compounded by those associated with another problematic area of economic theory, namely that of knowledge. Knowledge is also a concept that has multiple meanings, and one that poses important theoretical and methodological problems. Nor is it always clear where the boundary lies between knowledge and other notions such as data, information, competences, capabilities and so on. One of the fundamental characteristics of what is called ‘the knowledgebased economy’ is the spectacular growth in economic transactions relating to knowledge itself (Maskell and Malmberg, 1999; Antonelli, 1999). KIBS firms are organizations that are particularly representative of this economy, since knowledge constitutes both their main input and output. These firms are both processors and producers of knowledge. The aim of this chapter is to examine the modes of knowledge processing and production used in such firms and their implications for the question of innovation produced...

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