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Innovation management is inherently inter-disciplinary, but it is much more than simply applying business and management disciplines to innovation, and over time the field has developed a distinct body of knowledge. However, in this paper, we argue that the field of innovation management has failed to fully benefit from the proliferation of relevant research because much of this work has not been sufficiently coherent and cumulative. One reason for this, we propose, is the propensity to follow and fit research and publications into contemporary fads rather than to ground work in more fundamental themes and challenges. We present two examples of such fads, open innovation and business model innovation, to illustrate the trend. Finally, we suggest some more fundamental integrating themes and management challenges, drawing upon the latest edition of Managing Innovation (Tidd, J and J Bessant (2018). Managing Innovation: Integrating Technological, Market and Organizational Change, Sixth Edition. New York: Wiley).¹

This paper adopts a cross-country, multisector approach to investigate the intra- and inter-industry effects of foreign direct investment (FDI) on the productivity of 15 emerging market economies in 2000 and 2008. Our main finding is that intra-industry FDI has a large positive effect on total and “exported” labor productivity. The effects of FDI on total factor productivity are much more elusive, both in statistical and economic terms. This result suggests that foreign firms raise the performance of their host economies through a direct compositional effect. Foreign firms tend to be larger and more input intensive and have greater access to foreign markets than domestic firms. Their greater prevalence mechanically increases average labor productivity and export performance.

This paper revisits the Kuznets postulate that structural transformation will be associated with increasing inequality using comparable time series data for 32 developing and recently developed economies for the post-1950 period. We find that structural transformation in the majority of our economies has resulted in the movement of workers from agriculture to services, and not to manufacturing. Economies show different paths of structural transformation that cut across geographical regions, being either structurally underdeveloped, structurally developing, or structurally developed. We see clear differences in the structural transformation–inequality relationship depending on the stage of structural transformation that a particular economy is in, as well as across regions. We do not see a Kuznets-type relationship between manufacturing employment share and inequality when we take into account the different paths of industrialization that economies in our dataset have followed. On the other hand, inequality unambiguously increases with structural transformation if the movement of workers from agriculture is to services.

This collection of essays demonstrates that research on services innovation is now a vibrant and mature field within innovation studies. Examining the development of this field, and the contributions of these essays in particular, we argue that the time is right for a "marriage" between the study of services innovation and mainstream innovation studies. While there is a great deal to be learned from the study of services innovation, treating this as a separate area of study runs the risk that important lessons for the study of innovation within manufacturing and other sectors may be lost. These essays point the way toward more integrated approaches, which are particularly suitable for studying innovation processes in the knowledge-based economy.

The ability of firms to maximise their innovative potential is fundamental to economic growth. The successful implementation of human resource management (HRM) practices is important for firm performance, and there is a growing understanding of the benefits to firms when HRM practices are applied together. We investigate if HRM practices are significantly more effective when implemented as ‘bundles’ or ‘systems’ of complementarities than when they are implemented individually in Irish manufacturing and service firms. The National Workplace Survey (2009a), a dataset rich with information on HRM practices at the firm level, is employed. HRM bundles relating to performance management and appraisal, knowledge sharing and involvement and empowerment in decision-making are all positively associated with innovation in manufacturing and service firms, and bundles of flexible employment contracts practices positively influence innovation in service firms. In summary, HRM practices when applied together, rather than in isolation, are important for firm innovation.

This study demonstrates that the HO model proves useful for assessing the competitive factors in the delivery of services. However, further analysis that draws on the modeling framework of microeconomics and industrial organization is required.

Innovation processes in services remain under-researched, but recently large-scale surveys have been conducted which allow for a more systematic appraisal of the level and scope of innovation in services. To date, much of the literature on innovation in services focuses on the adoption and use of information and communication technologies (ICTs). Innovation in services, and services innovation, should, however, be understood in broader terms, and this understanding should extend to non-technological innovation. This paper presents evidence from a recent large-scale survey of innovation amongst German commercial service firms. It shows that services are much more active with respect to innovation than is widely thought. They are innovative in terms of being producers of service and process innovations. From our broader perspective, we examine the pattern of innovation as it relates to the standardisation-particularisation of service products, across a range of service sectors and across firms of various sizes. The production of bespoke or customised services shaped by client inputs has long been considered a defining characteristic of many services, and one that has affected their innovation potential. The present analysis reveals a pattern of diversity in behaviour, which reflects the diversity amongst service firms, and demonstrates the need for more subtle and differentiated analyses of services and services innovation.

Involving customers in the development of new products and services helps firms understand customer needs, increasing the likelihood of meeting those needs and expectations. Although a large body of literature addresses the implications of customer involvement for project performance, the results of previous research are somewhat inconsistent. This paper explores this issue by examining the differing impact of customer involvement on the development of new products and new services. We propose that the role of customer involvement differs for these two types of innovations, with involvement in the early stages more important for products and involvement in the launch stage more important for services. Our results, based on a comprehensive dataset on customer involvement in innovation, are consistent with such a pattern, suggesting that more attention should be paid to the conditional benefits of customer involvement in different types of solution development.

This investigation aims to compare the usefulness and the potential contributions of Artificial Neural Networks (ANNs) in the marketing field, particularly, when compared to traditional modelling based on Structural Equations. It uses neural network modelling and structural equation modelling (SEM) to evaluate loyalty in the bank industry in Brazil. Based on a data collection of 229 bank customers (micro, small, and medium companies) from the Northeast of Brazil, the key objective of this study is to investigate the main drivers of customer loyalty in this industry. Neural networks highlight the role of the relationship quality on customer loyalty. The technique SEM confirmed six of the seven hypotheses of the proposed model. The findings highlighted the point that micro, small, and medium companies’ loyalty to their main bank is strongly influenced by affective commitment. Comparing the results achieved from both methodologies, some similarities can be found. Relationship quality is a second order construct that includes satisfaction and affective commitment as its key components, both of which are highlighted on the structural model. The strongest impact in this model is in the relation between satisfaction and affective commitment. This result suggests that, for this marketing problem, ANN and SEM seem to be complementary statistical tools, bringing complementary conclusions.

The purpose of this paper is to contribute to understanding innovation dynamics in services, in particular the link between innovation and productivity. A methodology to explain this link is suggested. Instead of establishing a single, direct connection between innovation and labor productivity, as in earlier approaches in the services literature, a simultaneous equations model is used. We put forward an extended version of the CDM (Crepon, Duguet and Mairesse) model, incorporating two feedback effects and using innovation activities rather than the more restrictive R&D proxy. Activities prior to the innovation implementation are also taken into account allowing for direct and indirect effects on labor productivity. Moreover, we discuss and handle the oftentimes overlooked methodological problems affecting this relationship. Micro data for ten service sectors in Portugal are used to estimate the model. The existence of a Schumpeterian virtuous cycle is confirmed, pointing to a mechanism reinforcing innovation investment returns. We find that innovation activities have a positive impact on labor productivity, but no evidence was found of a significant direct effect of innovation output. Labor productivity also improves with management capabilities. Relationships with customers, suppliers and cooperation partnerships significantly increase the probability of innovating, suggesting that stimulating organizational networking is a key element in a service firm’s innovation strategy.

This article examines the dynamic relationships between competitive strategy and information technology (IT)-based product and process innovation in financial services. The study draws on detailed case studies of five IT-based innovations: Interbranch Online service, Automated Teller Machine service, Credit Card service, Remote Banking service, and Electronic Funds Transfer at Point of Sale service. It examines the development of these innovations in the Thai banking industry from the mid-1960s. The results indicate the limitations of the Reverse Product Cycle model approach, and an alternative conceptual framework and a country-specific innovation model are proposed. Possible avenues for further research on innovation in services and service innovation are suggested, together with steps towards developing a unified approach to innovation and competition for both the service and manufacturing functions.

This study investigates the effects of openness on the different stages of the innovation process and further on firm performance. More specifically, it concentrates on inter-firm cooperation and information sourcing practices, which embody the implementation of an inbound open innovation strategy. Cooperation and information sourcing from market actors is contrasted with cooperation and information sourcing from competitors. To different extents, these actors may shape research and development (R&D) investments, affect success of the innovation process and contribute directly as well as through the innovation process to the labour productivity. Effects of these simultaneous practices on the innovation process are investigated in service sector firms, which have so far been largely neglected in (open) innovation studies. Results indicate that cooperation with and information sourcing from competitors positively influence innovation performance while market cooperation and information sourcing is resource-intensive and deteriorates performance on the short term.

This study contributes to the scarce stream of literature that concentrates on measuring the firm-level effects of knowledge management (KM) strategies on innovation performance. It evaluates the impact of codification and personalisation strategies, both individually and jointly, distinguishing between innovation propensity and innovation output. The research applies a knowledge production function (KPF) approach to the Community Innovation Survey (CIS) data for Luxembourg. Reliance on internationally agreed definitions and focus on an open international economy largely dominated by innovative service firms provide an original and significant contribution to the available empirical literature. Findings indicate that personalisation and codification effects on innovation propensity are highly comparable. In contrast, personalisation exerts a positive effect on innovation output, whereas codification does not. Results further advocate that codification affects output only when combined with personalisation. However, the adoption of mixed strategies does not seem to be more effective than a pure personalisation strategy.

This paper examines the supply side drivers of growth in emerging market and developing economics (EMDEs) during the past decades and discusses the role of productivity-enhancing reforms in bolstering future growth prospects. It examines aggregate and sectoral productivity trends including around reform episodes to draw broad policy lessons on what policies are needed to increase productivity. Findings suggest appropriate policies need to be tailored to the stage of economic development and to other pertinent features that give rise to the heterogeneous experiences of EMDEs.

International trade of goods and services plays an important role in the growth of economies. To make this growth sustainable in the long run, it is important to understand in what goods or services countries have comparative advantage (CA). The present work focuses on the ten biggest developing economies, revealing their CA in the services sector. The main results reveal that India has a CA in computer and information services, Macao, Thailand and Turkey in travel services, China, Hong Kong, India and Taiwan in other business services, Korea in construction and transport services, and Singapore in financial and transport services.

A Medical Cyber-Physical System (MCPS) represents a sophisticated healthcare framework seamlessly integrating cyber and physical elements to enhance medical processes, diagnostics, and patients. The integration of Artificial Intelligence (AI) into the healthcare system has been pivotal in advancing intelligent MCPS and ushering in an era of advanced healthcare solutions. The paradigm of smart hospitals aspires to implement intelligent solutions seamlessly integrating hardware and software to control, supervise, and monitor patients while assisting healthcare professionals. Such solution is essential for smart decision-making and enhancing healthcare services. However, complete utilization of this intelligent MCPS relies on an effective framework that should facilitate the interaction among patients, medical devices, AI services and hospital staff. This paper introduces a Digital Twin (DT)-based Smart Medical Cyber-Physical System (DT-MCPS) designed to enhance smart hospitals. Leveraging DT technology, DT-MCPS constructs a virtual replica of the hospital, facilitating precise control and supervision of patient care, coupled with service optimization through comprehensive data integration. DT-MCPS promotes personalized decision-making by seamlessly integrating medical records and real-time monitoring of physiological data, enabling predictive insights into disease progression. Moreover, DT-MCPS employs a model-based platform founded on web services to monitor the patient’s state in real-time while accurately simulating the hospital medical systems workflows and contributing to long-term health management. Experimental results showcase the efficacy of DT-MCPS in enhancing hospitalization services, streamlining real-time control, and achieving highly precise personalized patient diagnostics.

Services sector has emerged as the largest and fastest-growing sector in the world economy in the last two decades, providing more than 60 per cent of global output and, in many countries, an even larger share of employment. Not only has the services sector grown in terms of its share in global output and employment, its share in total trade has also grown rapidly in this period. The growing importance of services sector and the corresponding rise in its role in integrating the world economy has led to a stream of literature that examines different aspects of trade in services.

This paper undertakes a selective review of both theoretical as well as empirical studies on trade in services. It identifies some of the conceptual issues in this area, e.g., whether theories of trade are relevant for services; what are the important barriers to trade in services; and how are these barriers measured. The main objective of the paper is to provide policy insights and future areas of research in trade in services.