Innovation activities in KIBS and Manufacturing

Based on panel dataset of 33100 Italian firms collected by the MET company, this paper compares the differences in the innovation value chain of Knowledge-Intensive Business Services (KIBS), manufacturing and other services. The study demonstrates the relative importance attributed to different internal and external sources of information on innovation outcomes of KIBS in terms of product, process and organization, compared to manufacturing industries and to other services. Significant similarities exist between some aspects of firms’ innovation behavior in these sectors: strong complementarities emerge between firms’ internal and external knowledge. However, the outsourcing to Italian firms, to foreign partners or to other institutions and the local, domestic and international networking are valued differently across the three sectors. The findings shed new light on the innovation process of Italian firms and can be used in innovation management decisions.