Services Engineering and Management Summer School, Helsinki University of Technology, August 28-September 2

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

At Suomilinna

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From PREST/Manchester Business School

Drawing on studies: The Future of R&D in Services" and RENESER "Research Needs for Service Industries"

Linear model of innovation, from manufacturing

• Science Base to Industrial R&D, Product Innovation to Productive Process, Production Innovation to Use in Market
• Arrows between everything, lots of feedback loops
• Upstream science base is influenced by feedback and new knowledge from the others
• Some ideas of strategic research, can find way to application
• A lot of work in genomics and biotech

EU leading to policies to encourage investing in R&D

• Lisbon agenda of being dynamic and innovative

U.S. spends a greater share of GDP on R&D than Europe

• Service sectors in the U.S. spend more on R&D than Europe
• Around 2000, over 1/3 of business expenditure on services, whereas Europe was 12%
• Europe will take decades to catch up

UK manufacturing and services growing in parallel, much lower in services

OECD: Services % of GDP is growing much faster in U.S. than Europe

• Belgium, Germany, Ireland are bucking the trends a little 
• Recorded R&D is services has grown, they didn't use to track this
• So a survey of service companies they think are investing
• 95% of service companies spend nothing
• Would not place much confidence on statistics on R&D, although sampling better now than before
• U.S. and UK were first in measuring services in R&D, Japan rather late

NSF 2000: Which services do R&D?

• 9 services sectors, Japan does 1 and Germany does 2, so would expect a lot of invisible activity
• IT services is a big sector
• R&D services means business is doing R&D, 10% of companies do this
• Communications sectors is small in some countries, not elsewhere
• Transportation strong in France
• Retail strong in U.S. and Canada
• Can't say much about professional services, as they're hidden, and not elsewhere classified
• It's more a matter of judgement in statistic measurements

One other source of R&D, Community Innovation Centre, being measured across EU

• Ask 1000 companies in each country
  • Do you do it in-house, with others?
  • Almost 50% of firms don't do R&D, over 50% say that do
  • They conduct less R&D than professional size
• Technology-related KIBS are most active
• Even small firms do R&D

Official data:

• Almost all retail and wholesale trade R&D done by 3 firm types
• Professional and equipment wholesalers (selling computers), electrical good wholesalers (appliances) and drug wholesalers
• Findings: most classifications are by output product, but where companies are classed depends on where their human resources are.
• A lot of manufacturers have been been reclassified as wholesalers (e.g. Dell as a computer retailer)
• Social science service firms are excluded.
• Frascati Manual, includes social science in the definition of R&D
  • Tax credits written to support science
  • We don't want market research

Within company:

• R&D may be lower, even if incluidng underdevloped
• May be budgeted and reported as others

Barro: innovation is service led, which leads to products

Case studies

• When some companies pressed on innovation, what they were doing was R&D
• BBC separates technology R&D from creative content R&D
• Some companies say that they don't have R&D, but do provide a sandbox
• Telecom companies working on visual radio
• Almost all firms said that innovation would be relevant to R&D in the future
• Public sector uses the word R&D more

Community innovation survey: expenditures

• Share of effort on R&D

Two new:

• Professions-led innovation, e.g. associations, training
• Practice-led innovation, i.e. in the course of delivering the service
  • Innovation management is not well done that is reproduced
  • Done by one worker, and it's not picked up
  • Efforts to create knowledge management systems

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