Rethinking Innovation Comparisons between Manufacturing and Services: The Experience of the CBR SME Surveys in the UK

Most previous research comparing innovation activity in the manufacturing and service sectors has taken insufficient account of the variation in the intensity and nature of innovation activity within those sectors. We address this question using a simple sectoral split and applying it to manufacturing and the business services sector. The results indicate that in some respects there is greater variation in innovation activity within manufacturing and business services than between them. In addition, there is strong similarity between corresponding groupings in each sector. Clear distinctions in innovation patterns do exist between the manufacturing and business service sectors, and imply a considerable depth of technological innovation capability within both sectors. These results imply that the supposed differences in innovation between manufacturing and services may have been exaggerated in earlier research. A previous version of this paper was presented at a workshop entitled “Conceptualising and Measuring Service Innovation” at the Centre for Research in Innovation and Competition (CRIC) at Manchester Business School in May 1998. Acknowledgements The authors acknowledge the financial support of the Economic and Social Research Council for the research underlying this paper.