Innovation, Service Types, and Performance in Knowledge Intensive Business Services

Abstract Knowledge Intensive Business Services or KIBS are defined as customized and innovative business services. In this chapter, we argue that not only innovation and customization are complementary in KIBS, but also that replication via standard and modular services determines a KIBS firm’s performance. Using fuzzy sets qualitative comparative analysis (fs/QCA) on a sample of 319 KIBS firms, we explored the best-performing configurations resulting from a combination of different service innovations with different service types. In doing so, we separately considered product and process innovations and four different types of services (customized, standard, standard with minor customizations, and modular). Our results emphasize the complementarity between process innovations and service standardization on a firm’s profitability, while highlighting the complementarity between process innovations, service customization, and modularity of a firm’s growth. The work described in this chapter contributes to the KIBS literature and provides deeper insights into the interaction between innovation and service types.