Using Intellectual Property Protection to Capture Value from Innovation in Knowledge Intensive Service Firms

Lead Research Organisation: University of Manchester
Department Name: Manchester Business School

Abstract

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Publications

10 25 50
 
Description Output 1: "The role of competitive strategy in capturing value from innovation in knowledge-intensive service firms", P. Desyllas, M. Miozzo, I. Miles and H. Lee.

This study builds on the strategy literature on competitive advantage and a problem-solving perspective of value creation and capture to understand how firms' approaches to capturing value from innovation are interrelated with their broader competitive strategy. Comparing and contrasting IP management between cost- and differentiation-focused firms, we find that cost-focused firms perceive jointly all value appropriability mechanisms as being relatively more effective means of capturing value from innovation, compared with differentiation-focused firms. We also find that cost-focused firms perceive formal appropriability mechanisms as being relatively more effective means of capturing value from innovation relative to non-formal appropriability mechanisms, compared with differentiation-focused firms. Importantly, the relation between strategy and IP management holds even after controlling for previous explanations of IP protection choices on the basis of innovation- and industry-level factors. These results contribute to the literatures on value creation and capture by showing how IP management and the competitive strategy of firms are interrelated.
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Output 2: "Innovation collaboration and appropriability by
knowledge-intensive business services firms", M. Miozzo, P. Desyllas, H. Lee, I. Miles.

We uncover a "paradox of formal appropriability mechanisms" in the case of knowledge-intensive business services (KIBS) firms. Despite evidence that KIBS firms do not typically consider formal appropriability mechanisms, such as patents, to be central mechanisms for capturing value from innovation, we show that they are nevertheless important for their innovation collaboration. We find a significant positive association between the importance of innovation collaboration and the importance of formal appropriability mechanisms. We interrogate the evidence for clients, as they are the most important partners for innovation collaboration. We find that the importance of innovation collaboration with clients goes hand-in-hand with the importance of formal appropriability mechanisms, although a negative relation appears when firms assign very high importance to formal appropriability mechanisms. Thus, modest levels of emphasis on formal appropriability mechanisms may prevent conflicts over ownership of jointly developed knowledge assets and knowledge leakages, while also avoiding the possibly negative effects of overly strict controls by legal departments on innovation collaboration. As well as exploring formal appropriability mechanisms, we also investigate the relationship between contractual and strategic appropriability mechanisms and innovation collaboration for KIBS firms.
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Output 3: How much value is in business model reconfiguration? P. Desyllas, A. Salter, O. Alexy

This study contributes to research on business model innovation by exploring the links between business model reconfiguration (BMR) by incumbent firms and organizational performance. We conceptualize BMR as concurrent adjustments of multiple business model constituent elements, such as a firm's resources and competences, internal organization, relation to external stakeholders, and the nature of its value proposition (e.g. Gerasymenko 2015, Demil and Lecocq 2010). Our results suggest that the scope of BMR has important implications for incumbent firms' ability to improve performance after reconfiguring their business models. Although on average BMR is not associated with superior performance, we find that an inverted U-shaped association between the scope of BMR and firm performance holds for firms which are also engaged in process/product innovation. This result emphasises the benefits of modest BMR and suggest that, even though BMR should be carried out in a way that preserves coherence among the various business model constituent elements after BMR takes place, BMR can also have organizational cost implications that must be considered. Our results are also consistent with the view that there are complementarities between product/process innovation and BMR. These complementarities may reflect some superior innovation capacity of firms engaged in BMR to sense and seize new opportunities and deploy the requisite complementary assets. To the extent that new business models are directly linked to new products or processes, these more tangible forms of innovation may offer greater legitimacy and sense of direction among internal and external stakeholders. We also find that the introduction of radically new products/processes strengthens further the moderating role of product/process innovation, suggesting that there is a greater value creation potential waiting to be unlocked by BMR.
Exploitation Route Our findings have implications regarding the development of a deeper understanding of innovation in services. The so-called "peculiarities of services" that set them apart from manufacturing, such as the intangible nature of their product, simultaneity of production and consumption, heterogeneity of outputs and importance of organizational factors in firm performance may even extend to the ways of appropriating the benefits of innovation. Some KIBS firms play central roles in innovation processes throughout the economy, as sources of innovations, agents of transfer and diffusion of knowledge, or innovation support for other sectors. Our results pave the way for a better understanding of both inter-organisational collaboration for innovation and the role of the functioning of the intellectual property rights system for KIBS firms.
Sectors Education,Financial Services, and Management Consultancy,Healthcare

URL http://www.bath.ac.uk/management/faculty/panos-desyllas.html
 
Description Innovation Caucus Member (Innovate UK & ESRC)
Geographic Reach National 
Policy Influence Type Participation in a advisory committee
URL http://innovationcaucus.co.uk/
 
Title Profiting from innovation in services 
Description We have developed an original survey sample of a maximum of 255 product and process innovations introduced by 167 publicly-traded British and American KIBS firms. The survey allowed us to explore firm-level characteristics which are not available from existing databases. This survey provides information on a firm's competitive strategy; the extent to which knowledge is codified, systematised and formalised; innovation collaboration activity during the creation and commercial exploitation of innovation, details about business model innovation activity etc. Drawing on these data, one can explore various possible links between competitive strategy, innovation collaboration and IP management. In addition, our study explores the perceived effectiveness of the full range of appropriability mechanisms, including formal appropriability methods (patents, trademarks, copyrights, design rights), contractual agreements used as behaviour enforcement mechanisms (employment contracts and confidentiality agreements), and strategic appropriability methods (secrecy, lead-time advantages, complexity, complementary assets). Most previous work only compares patents with secrecy. 
Type Of Material Database/Collection of data 
Year Produced 2014 
Provided To Others? Yes  
Impact Our study has been accepted for publication in a special section on "Patent Use" of the peer-reviewed academic journal Research Policy with guest editors Professors Ashish Arora (Duke University, USA) and Suma Athreye (Brunel University, UK). 
 
Description How much value is in business model reconfiguration? 
Organisation Technical University of Munich
Country Germany 
Sector Academic/University 
PI Contribution As part of a funded collaboration initiative between Bath University and TUM, my Bath colleague Professor Ammon Salter and I work jointly with TUM-based professor Oliver Alexy on a project using the dataset that has been created thanks to the ESRC-funded project.
Collaborator Contribution Joint research work
Impact Conference paper: How much value is in business model reconfiguration? Abstract: This study explores the link between business model reconfiguration (BMR) by incumbent firms and organizational performance. We investigate this relation using regression analysis and unique survey data from a sample of 206 publicly-traded UK and US service firms. Although, across all our sample firms, BMR is not associated with superior performance, an inverted U-shaped relation is estimated between the scope of BMR and firm performance for firms which are also engaged in process/product innovation. These results contribute to the innovation and business model literatures by offering support to the view that innovative incumbents need to adopt BMR that is broad enough to maintain coherence among business model constituent elements, but not so broad to avoid the escalation of conjectured organizational costs.
Start Year 2015
 
Description Profiting from Service Innovation 
Organisation UK Energy Research Centre (UKERC)
Country United Kingdom 
Sector Academic/University 
PI Contribution A conference was organised jointly by the Universities of Manchester, Bath, and the UK~IRC (a joint venture between Cambridge University and Imperial College London). The conference allowed us to communicate our findings and engage with the practitioner community in an extensive and systematic way. The conference brought the academic, business and policy making communities together in joint pursuit of responses to the question of profiting from service innovation. The roster of contributors outside academia included experts from industry (ARM Ltd, the Institute of Chartered Accountants of England and Wales (ICAEW), Google TV, McKinsey) and public agencies (UK Intellectual Property Office, US Patent & Trademark Office, European Patent Office). The event was widely advertised by the websites of the universities of Bath and Manchester, the UK~IRC and the ESRC. It was very well attended (40 participants) and we had a waiting list. Participants came from a wide spectrum of organisations, including Rolls Royce, Accenture, Thomson Reuters, OCS Group UK, Pragmatica Consulting. The panel session involving the Chief Economists of the UK, European and US Patent Offices triggered a very interesting debate about similarities and differences across different IP regimes and the future of business method patenting. Overall the verbal and written (only a handful of questionnaire were returned unfortunately) feedback that we received was "excellent".
Collaborator Contribution Speakers included ESRC project collaborators Ian Miles, Marcela Miozzo, Panos Desyllas, and Bruce Tether. Also two members of our project's steering committee participated in the conference: Professors Alan Hughes (Cambridge) and Mari Sako (Oxford).
Impact All podcasts from the event can be found at: http://www.uk-irc.org/archive/events-archive/profiting-from-service-innovation/
Start Year 2013
 
Description Research Associate at Cambridge University's Centre for Business Research (CBR) 
Organisation University of Cambridge
Department Centre for Business Research
Country United Kingdom 
Sector Academic/University 
PI Contribution Research collaboration, organisation of joint research events, offering/receiving feedback on work, sharing data etc.
Collaborator Contribution Research collaboration, organisation of joint research events, offering/receiving feedback on work, sharing data etc.
Impact A Conference jointly organised with the Universities of Bath, Manchester, Cambridge (Centre for Business Research), and Imperial College London (UK~IRC) on "Profiting from Service Innovation", London, UK, 8 October 2013 (http://ukirc.ac.uk/newsandevents/events/article/?objid=8284)
Start Year 2015
 
Description Research Associate at the Centre for Research on Entrepreneurship and Innovation (CREI) of the University of Bath 
Organisation University of Bath
Country United Kingdom 
Sector Academic/University 
PI Contribution One of the members of the centre with contributions to the organisation of research events, funding research etc.
Collaborator Contribution One of the members of the centre with contributions to the organisation of research events, funding research etc.
Impact One of the members of the centre with contributions to the organisation of research events, funding research etc.
Start Year 2016
 
Description Research Associate at the Manchester Institute of Innovation Research 
Organisation University of Manchester
Department Manchester Institute of Innovation Research (MIoIR)
Country United Kingdom 
Sector Academic/University 
PI Contribution Research collaborations, joint organisation of events, sharing of data and research feedback
Collaborator Contribution Research collaborations, joint organisation of events, sharing of data and research feedback
Impact Research collaborations, joint organisation of events, sharing of data and research feedback
Start Year 2013
 
Description Academy of Management Conference, Philadelphia, USA, August 2014 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Presented on "Strategy and IP management in Knowledge-intensive Service Firms"
Year(s) Of Engagement Activity 2014
 
Description Article on "How to collaborate and protect your intellectual property" 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact University of Bath School of Management Newsletter "Perspectives" (online) covering our ESRC-funded research outputs.
Summary of the article:"There is a growing consensus that the adoption of open innovation business models by firms contributes to
their innovation output and potentially their performance. However, as firms are becoming increasingly open and collaborate with horizontal and vertical partners, they are facing the challenges of protecting their intellectual property and of capturing value from innovation. Studies
have examined how formal and strategic appropriability mechanisms (e.g. patents, trademarks, design rights, secrecy, lead time advantages, complementary assets) influence the extent to which firms capture value from their innovation.
New research from Dr Panos Desyllas and colleagues delves further into this area, considering how the availability and use of different combinations of appropriability mechanisms are related to firms´ collaboration activity, especially with different partners
and at different stages of the innovation process. In focussing on how this applies to knowledge-intensive business services (KIBS) firms, their research has produced fresh insight"
Year(s) Of Engagement Activity 2013
 
Description Bath-TUM Workshop, Munich 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact The workshop took place on September 14-15, 2015, at TUM Business School. Paper presented: How much value is in business model reconfiguration?
Year(s) Of Engagement Activity 2015
 
Description British Academy of Management (BAM) Symposium: Capturing Value from Service Innovation 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Innovation in service firms has emerged as a very topical issue with the growing share of services

in the global economy, the blurring of the boundaries between services and manufacturing, and

the move towards the servitization of manufacturing. The aim of this symposium is to throw new

light on the so_called "peculiarities of services" that set them apart from manufacturing, such as

the intangible nature of their product and the simultaneity of production and consumption, by

focusing on the innovation process in knowledge_intensive services. The four symposium papers

explore service innovation topics ranging from the tension between standardisationspecialisation

in services, the influences of knowledge types on the innovation_related behaviours

of KIBS firms, their orientation towards open innovation, to the challenges of capturing value

from innovation. Our objective is to contribute towards developing a deeper understanding of

the linkages between innovation incentives, R&D inputs, R&D outputs and profit in knowledgeintensive

services.
Year(s) Of Engagement Activity 2013
 
Description Conference Organization "PROFITING FROM SERVICE INNOVATION" at Imperial College London 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact How do Knowledge-intensive Business Service (KIBS) firms capture value from innovation? What relevance do different forms of Intellectual Property (IP) and knowledge capture have here - formal methods (e.g. patents, trademarks and copyrights), contractual agreements (e.g. confidentiality agreements and employment contracts) and informal methods (e.g. secrecy and lead time advantages)? The first conference session will explore if and how the so-called "peculiarities" of services affect the ways in which firms use formal, contractual and strategic means to protect and capture value from their IP. The session will explore how features of the industry, firm and innovation bear on the selection of methods for capturing value from innovation. Particular emphasis will be devoted to the question of how far these choices are related to KIBS firms' general competitive strategies, and their approaches to knowledge management. The second session will be concerned with the extent and types of "open innovation" in services firms. How can we understand the various forms and configurations of collaborative relationships with suppliers, customers, competitors, universities, consultants or research labs during the innovation process? What are the challenges faced by each of these partners - for example, in finding the right balance between knowledge sharing and co-creation, on the one hand, and protecting their core knowledge assets and competencies, on the other? The last conference session aims to identify and discuss differences in IP regimes in different jurisdictions, including the United States, which take a more favourable stance to the legal protection of IP (especially in relation to business method and software patenting) than others, such as in Europe. What are the implications of IP regime differences for competitive strategy? Are these changing?
Year(s) Of Engagement Activity 2011,2013
URL http://www.uk-irc.org/profiting-from-service-innovation-conference-themes/
 
Description Interview to UK~IRC 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact This is an interview as part of the UK~IRC podcast series about the findings from the ESRC-funded project "Using Intellectual Property Protection to Capture Value from Innovation in Knowledge-intensive Service Firms" in general and the paper entitled "Strategy, Organization and IP Management in Knowledge Intensive Service Firms" in particular.
Year(s) Of Engagement Activity 2013
 
Description MSc Teaching on "Profiting from Innovation" at the University of Bath School of Management 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Postgraduate students
Results and Impact Incorporated published work and findings from the ESRC-funded project in the MSc course unit syllabus.
Year(s) Of Engagement Activity 2017
 
Description Participation at Academy of Management Conference, Atlanta, USA, August 2017 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Presentation of paper " When Does Business Model Reconfiguration Create Value? " at the Academy of Management Conference, Atlanta, USA, August 2017
Year(s) Of Engagement Activity 2017
 
Description R&D Management Society Meeting: Strategy, Organization and IP Management in Knowledge Intensive Service Firms 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Members of the ESRC project team co-organised and chaired a conference session on Knowledge Intensive Business Services
Year(s) Of Engagement Activity 2013
 
Description Strategic Management Society Meeting Presentation: Strategy, Organization and IP Management in Knowledge Intensive Service Firms 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact Presentation at the Strategic Management Society Meeting, Miami, USA
Year(s) Of Engagement Activity 2013
 
Description Strategic Management Society Meeting, Berlin, Germany 2016 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact Presentation on "How much value is in business model reconfiguration?" at the Strategic Management Society Meeting, Berlin, Germany
Year(s) Of Engagement Activity 2016
 
Description Talk at the European Patent Office (EPO) on "Protecting Intellectual Property in Business Model Innovation: Strategies for Innovating Incumbents and New Entrants" 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact Gave a talk on "Protecting Intellectual Property in Business Model Innovation: Strategies for Innovating Incumbents and New Entrants" at a conference on Intellectual Property which was organized by/at the European Patent Office in Munich. Participants were academics and EPO officials, including the EPO Chief Economist.
Year(s) Of Engagement Activity 2012
 
Description UK~IRC Podcast - Presentations by speakers at "Profiting from Service Innovation" Conference 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact A summary of several presentations at the "Profiting from Service Innovation" Conference
Year(s) Of Engagement Activity 2013
 
Description University of Cambridge Workshop on Business Model Innovation, December 2014 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact Gave a talk on "Open business models and business model innovation in KIBS firms" and participated in brainstorming sessions
Year(s) Of Engagement Activity 2014
 
Description University of Southampton Management School, Seminar: Strategy, Organization and IP Management in Knowledge Intensive Service Firms 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Other audiences
Results and Impact Invited seminar at the University of Southampton Management School
Year(s) Of Engagement Activity 2013