Innovation in KIBS Firms: The effects of innovation activities, employees level of education, and the sources in the supply chain

Abstract

There has been a growing interest in the study of knowledge-intensive business services (KIBS) due to the important role that they play in the business processes of their clients. They are characterized by high proportions of expert labour in their workforces. Even though extant literature assumes that KIBS firms are innovators, there is evidence that not all KIBS are equally innovative. Our exploratory research uses data gathered from the National Innovation Survey and uses the LOGIT model on a sample of 311 Peruvian KIBS firms. The effects of innovation activities, employee level of education and interplay in the supply chain on adoption innovations are determined. Findings indicate that not all innovation activities positively affect innovation. We found that most of these activities are related more to technological innovation than non-technological innovation, and the hiring of graduated personnel favours the development of organizational innovation. However, the interplay with customers, suppliers, and competitors has no present positive results concerning the adoption of innovations. Lastly, we conclude by highlighting the importance of managers crafting their innovation portfolios properly and the need for further research to determine the innovative behaviour of KIBS firms in the Latin American context.