Technological innovation in services and manufacturing: results from Italian surveys
Introduction
The service sector is nowadays a major component of modern advanced countries: in 1992 private and public services accounted for almost two thirds of jobs in most of the OECD countries. This is the result of a historical process which has seen a progressive shift of employment first form agriculture to manufacturing and then from manufacturing to service activities. Among the private service sectors, the more dynamic components over the last 20 years have been financial and business services along with community, social and personal services (OECD, 1996a).
The continuous proliferation of new services, and the processes of commodisation, industrialisation and reorganisation of services on a global scale, suggest that services are at the core of current structural changes in modern economies.
Technology and innovation activities represent major forces behind such structural processes, with information and communication technologies playing a pivotal role in revolutionising the ways most of `traditional' services are produced, traded and delivered as well as offering opportunities for the generation of new ones in a variety of service industries. This already suggests that the old view according to which service industries are technologically backward could be misleading. An increasing amount of empirical evidence is showing that technology does play a role in services. Recent OECD estimates show that service industries now perform in most countries almost a fourth of total business R&D (24.8% in 1991 compared to a share of 4.2% in 1981).2 Also with respect to the adoption and diffusion of new technologies, the service sector does not seem to be backward relatively to manufacturing. Service industries are heavy users of information technologies, and the bulk of information technology investment is actually used by services—around 80% in the UK and USA, with financial and communications services being the major technology adopters within services (OECD, 1996b). Furthermore, recent studies show that services are the industries which have benefited most (in terms of productivity gains) form the use of technologies embodied in new capital goods (OECD, 1996c). There is also increasing evidence that service sectors heavily invest in human resources, which are increasingly recognised as a key competitive element of firms' innovative strategies.
We are however a long way from having a satisfactory picture of the extent, role and nature of innovative activities in the service sector, the statistical data presently available on technology and innovation in services being still inadequate to represent the highly diversified universe of service activities. In the last two decades much of the theoretical and empirical literature on technology and innovation has in fact been focused on manufacturing. With respect to this sector we have learned a great deal about how innovation activities take place, their inducement factors, and major differences in the technological patterns across main typologies of industries and firms. Following the methodological framework and guidelines set out in the 1989 OECD `Oslo Manual' (OECD, 1989), in the last few years innovation surveys have significantly contributed to achieve a more comprehensive picture of the nature of innovation activities in manufacturing within a wider exercise of developing and refining science and technology indicators (Sirilli, 1997).
Only very recently some attempts to extend the use of innovation surveys from manufacturing to the service sector have been made. The evidence collected so far is however highly diverse and not comparable, due to the lack of standardisation of concepts and statistical methodologies used in the different countries. In some studies the methodology adopted for the manufacturing sector has been used without major adaptations (Brouwer and Kleinknecht, 1995), while in others innovation has been to differing degrees linked to technological and organisational changes (Australian Bureau of Statistics, 1995). A convergence process has however been started in the 1990's, with OECD and EUROSTAT playing a major role in promoting the development and use of common definitions and statistical procedures (Evangelista and Sirilli, 1995).
This paper is intended to contribute to this international endeavour by providing new empirical evidence gathered through the innovation survey carried out in Italy by the National Statistical Office (ISTAT) in collaboration with the Institute for Studies on Scientific Research and Documentation of the National Research Council. The methodology used is described in Appendix A. This survey represents the first large-scale statistical attempt to collect systematic information on innovation activities in the service sector on the basis of the guidelines indicated in the revised version of the OECD `Oslo Manual' (OECD–EUROSTAT, 1997).3 In particular, the richness of the Italian data-base resides in the size and representativeness of the sample made of 6005 firms drawn from a universe of 19,300 market service companies with more than 20 employees. The results of the survey allow us for the first time to get a broad picture of firms' innovation strategies and performances in the service sector and to highlight major similarities and differences with technological change in manufacturing. Such an analysis will be carried out looking at the type of innovation introduced (service/process), type of innovation inputs (R&D, design, software, training, investment in machinery and equipment, marketing), objectives of innovation (efficiency, quality enhancing), obstacles in introducing innovations, the sources of information used for innovating, and economic impact (sales and employment).
This paper is structured in four sections. Section 2addresses some conceptual and methodological issues in the measurement of innovation in the service sector, clarifying the methodological approach adopted by the Italian innovation survey. Section 3analyses the results of the survey, comparing the data, when appropriate, with the results of the 1995 innovation survey on manufacturing (ISTAT, 1995). Section 4summarises the empirical findings. Appendix A, prepared by Aldo Del Santo and Giulio Perani of ISTAT, sets forth the statistical methodology of the survey.
Section snippets
Measuring innovation activities in services: conceptual issues and methodology
The necessity to carry out a systematic data collection on innovation activities in the service sector is nowadays widely recognised. International statistical organisations, such as OECD and EUROSTAT as well as national statistical offices, have only recently started to move the first steps in the direction of improving definitions, classifications and the statistical procedures for the collection of reliable and comparable data on technology and innovation in the service sector (EUROSTAT, 1995
Relevance of innovation in the service sector
Table 1Table 2 show for the service sector as a whole, for the main firm size classes and service industries, the number of firms covered by the survey and the percentage of them which have introduced at least one technological innovation in the period 1993–1995.5 The figures on services presented in these and the following tables are those
Conclusions
The results of the Italian survey in the service sector provide a first empirical evidence on a variety of aspects of innovation activities in services and allow to highlight major similarities and differences with technological change in manufacturing. The most relevant results of this paper can be summarised as follows.
Technological innovation is quite a diffused phenomenon in market services: just less than one third (31.1%) of market service firms have introduced technological innovations
Acknowledgements
The authors are grateful to Mario Pianta and Daniele Archibugi for comments and Maria Savona for her help in the elaboration of data and preparation of the statistical material. This research has been partly funded by the European Commission through the IDEA Project of the `Targeted Socio-Economic Research'.
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Rotating first authorship. E-mail: [email protected].