A Multi-disciplinary Perspective
Edited by Faïz Gallouj and Faridah Djellal
Chapter 25: A Dominant Node of Service Innovation: London’s Financial, Professional and Consultancy Services
Peter Wood and Dariusz Wójcik The financial services: a paradigm for knowledge-intensive business service innovation? The innovativeness of the London economy, and its basis in financial and other business service functions, has been a well-established feature of the UK economy since at least the early 1990s (Wood, 2008). It has thus presented a paradox for conventional innovation studies. In 2004, according to the Community Innovation Survey (CIS), the city’s labour productivity was the highest of any UK region and its businesses showed the highest percentage turnover of products new to the firm or significantly improved. Nevertheless, they also spent the lowest regional share of workplace gross value added (GVA) on research and development (R&D): 0.5 per cent compared with 3.3 per cent in the Eastern region and 2.2 per cent in the South East. London’s innovativeness has therefore depended, not on the creation of new technologies, but on the flexibility with which its service labour skills are adapted to new demands, often facilitated by new or established technologies (Wilson, 2007, 13–14). Such innovation is marked by successful change in international markets arising from interactions between the city’s specialist financial, professional, business and creative expertise and that of its clients.1 The financial services have attracted most attention, mainly because of their historic role in managing UK capital resources and, in modern times, supporting international trade and arbitrage. In spite of their diversity, they also display strong commercial, cultural and political cohesion, with international and national institutions concentrated in...
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