Patterns of Innovation Capabilities in KIBS Firms: Evidence from the 2003 Statistics Canada Innovation Survey on Services

The aim of this paper is to shed light on complementarities and substitutions between various types of innovation capabilities in knowledge-intensive-based service (KIBS) firms. The data used in this study are the responses of 2,625 innovative firms to the 2003 Statistics Canada Innovation Survey on services. The empirical results suggest the presence of three patterns of complementary innovation capabilities, one pattern of substitute activities and finally, four patterns of innovation capabilities that are independent from each other. Hence, the results suggest the presence of complementarities: first, between internal RD, external RD, acquisition of equipment and machinery, and marketing activities; second, between external RD, acquisition of equipment and machinery, acquisition of external knowledge and marketing activities; third, between acquisition of equipment and machinery, acquisition of external knowledge and marketing activities. Such complementarities lead to the conclusion that, in practice, managers of KIBS firms consider the consolidation of these capabilities jointly instead of separately. The paper also discusses issues related to patterns of capabilities that are substitutes and independent from each other. The results of this study also show significant heterogeneity in the determinants of the different patterns of innovation capabilities.