Innovation and Growth in KIBS: The Role of Clients’ Collaboration and Service Customization

In this paper, we analyse KIBS firms and posit that two core attributes of KIBS, namely collaborative relationships with clients and product customisation, foster the ability to develop successful, new product innovations. We disentangle the role of customisation and collaboration choices by looking at how they jointly affect the impact of innovation over firms’ performance, asking to what extent and how firms should collaborate with clients and customise their services. We test our hypotheses on a sample of Italian KIBS firms. Our results show that product innovations that are new to the industry are relevant and, counter intuitively, show that most growing KIBS firms do not have the highest service customisation and collaboration breadth with their clients. Most growing firms develop mass customisation strategies and they leverage on focused collaboration strategies with clients.