On The Performance Implications of Diverse Innovation Types and Degree of Innovativeness in KIBS

KIBS literature has so far provided limited quantitative evidence on the relationship between innovation and performance and almost nothing on how types of innovations and degree of innovativeness affect diverse performance variables. In this study, we distinguish between innovations aimed at introducing new products and innovations aimed at introducing new processes, as well as innovations new to the firm and innovations new to the industry, and we hypothesize that they differently affect a firm’s performance in that they display different objects and degrees of disruptiveness. After empirically testing our hypotheses on a sample of 238 Italian KIBS firms, our results confirm that diverse types of innovations are not all positively associated with a firm’s performance. Particularly, our findings show that innovations new to the firm are more performing than innovations new to the industry, process innovations are more strongly related to a growth in ROI than product innovations are, while product innovations are more strongly associated with a growth in market share. Overall, at least in the short run, “imitators” seem to be the most performing innovators. In this study, we contribute to the existing literature on KIBS by showing that, while it strongly emphasizes the role of innovations in KIBS firms, it also has so far underestimated the importance of disentangling different types of innovation and their performance and strategic implications