Marco Bettiol

Codification and creativity: knowledge management strategies in KIBS

Purpose – The paper aims to analyze the relationships between standardization and creativity in the process of service innovation in knowledge‐intensive business services (KIBS), specifically in those specialized in highly creative outputs (KIBS in design and communication). Studies on knowledge management and on service management emphasize the opportunity to gain efficiency through a standardization of services and organizational processes. However, creative activities are characterized by informality and difficulty to be standardized.Design/methodology/approach – The study adopts a qualitative research approach. Two case studies of medium‐size KIBS specialized in design and communication, localized in Bangalore (India) and in Treviso (Italy) are developed to identify how KIBS approach knowledge management both internally and externally and how firms structure the innovation process.Findings – KIBS can use a suitable knowledge management strategy to balance creative outputs with standardization based on...

The Hidden Side of Design: The Relevance of Artisanship

Design Mysteries Become No Mysteries The concept of “industrial atmosphere,” elaborated by Alfred Marshall,1 plays a crucial role in explaining the link between geography and innovation.2 Clusters and industrial districts benefit from the access to a common pool of skilled workers and to new ideas that easily circulate among the firms and the professionals who share the same local context and socio-cultural background. Indeed, Marshall affirms that “mysteries of the trade become no mysteries, but are, as it were, in the air, and children learn many of them, unconsciously.”3 Knowledge, although tacit and socially embedded, is in the air, freely available to professionals and firms within clusters and industrial districts. Interactions among local actors are facilitated by physical proximity and shared local culture. “Being there” (located in a cluster or industrial district) is a necessary, although not sufficient, condition for absorbing and exploiting tacit knowledge. “Industrial atmosphere” has been used to interpret the diffusion of tacit knowledge among small and medium firms. The flexible specialization in traditional industries,4 such as textile, fashion, machineries, and furniture, and the peculiar organization of Italian firms into industrial districts (at least in the center-north of the country) were an important counterpart of the work of the most important Maestri of Italian design. Not by chance, designers such as Achille Castiglioni, Michele De Lucchi, Vico Magistretti, Marcello Nizzoli, Aldo Rossi, Richard Sapper, and Marco Zanuso (just to name a few) worked closely with firms that were based within these industrial districts. The extraordinary creativity of Italian designers met the flexibility and sensitivity of local entrepreneurs who were keen to differentiate their products through the lenses of quality and esthetics. The Milan area was the epicenter of this phenomenon, where a specific mix of designers, based in the city center, came together with firms located in the suburbs of Brianza (where an important furniture district is located). Tacit knowledge ran fluidly in the relations among the designers and entrepreneurs, as well as among firms within the district. Quoting 1 Alfred Marshall, Principles of Economics, (London: Macmillan and Co. Ltd., 1920). 2 Elisa Giuliani, “The Selective Nature of Knowledge Networks in Clusters: Evidence from the Wine Industry,” Journal of Economic Geography 7 (2007): 139-68. 3 Marshall, Principles of Economics. 4 Michael J. Piore and Charles F. Sabel, The Second Industrial Divide: Possibilities for Prosperity, (New York: Basic Books, 1984).

Market extension and knowledge management strategies of knowledge-intensive business services

The paper aims at analysing the relationship between the market extension of Knowledge-Intensive Business Services (KIBS) and their knowledge management strategies. The literature emphasizes the strong relationship existing between KIBS and their customers in terms of innovation process and knowledge creation. We argue that the knowledge management strategies – in terms of knowledge codification, personalization, and knowledge creation – implemented by a KIBS is related to their geographical market extension. A quantitative approach is developed based on more than 150 Italian KIBS specializing in design and communication. The paper enriches the research framework concerning KIBS by emphasizing also the role of partners other than customers in KIBS’ knowledge management strategies.

Determinants of Market Extension in Knowledge-Intensive Business Services: Evidence from a Regional Innovation System

Several studies have emphasized the role of knowledge-intensive business services (KIBS) in fostering innovation in metropolitan areas and regional innovation systems. Such areas are capable of expressing a strong demand for KIBS and consequently stimulate the rise and growth of KIBS. Despite an abundance of literature on KIBS emphasizing the relevance of spatial proximity to customers, many KIBS develop relationships on a broader national or even international scale. No studies have focused explicitly on this apparent discrepancy as yet. The aim of this paper is therefore to fill this theoretical and empirical gap by explaining the firm-level factors relating to the market extension of KIBS within the framework of regional innovation systems. Our analysis is based on a quantitative study on more than 150 KIBS supplying design or communication services located in the Veneto region (north-eastern Italy), an area that can be described as a regional innovation system. Five variables were considered, that is, size, experience, service standardization, investments in network technologies and relational intensity. Our results confirm that three of these variables, but not service standardization and relational intensity, correlate positively with the market extension of KIBS. Policy implications are also discussed.

Creativity Versus Standardization in Knowledge-Intensive Business Services: A Real Trade-Off?

In the literature on knowledge-intensive business services (KIBS), scholars have debated the role and extent of their standardization, and two main stances have emerged. On the one hand, some studies explicitly deny the possibility of a service standardization and emphasize the relevance of customization: the value of KIBS lies in their capacity to offer tailored services capable of meeting their client’s needs concerning access to technical, commercial, or scientific knowledge (Miles, 1995; Muller and Doloreux, 2009). According to the literature on business services, it is in the nature of KIBS to differentiate their offering to suit their client’s requirements (den Hertog, 2000). On the other hand, other scholars have stressed the advantages of service standardization and specifically of KIBS (Tether et al., 2001). Through standardization, the service provider can increase productivity and adopt an industrial model of production similar to manufacturing firms. Standardization can lead to scale: service firms can increase in size and improve their growth by overcoming the Baumol’s disease problem (Baumol and Bowen, 1966).

Industrial District Firms Do Not Smile: Structuring the Value Chain between Local and Global

Abstract Defined as local manufacturing systems, industrial districts have been recognized as particularly important for the location of firms’ manufacturing activities intertwined with innovation processes. The debate on the internationalization of production has stressed the low value related to manufacturing within value chain activities (smile framework), emphasizing the need to focus on high value-added activities (R&D or marketing). Following multinational enterprises’ internationalization strategies, also district firms have progressively offshored their production phases in the past years. However, recent studies focused on backshoring have revamped the attention on the domestic control of production for firms’ competitiveness. This chapter explores district firms’ location choices for manufacturing activities between local and global. Based on an empirical analysis of about 260 Italian district firms specialized in mechanics, furniture, and fashion and supported by a case study investigation, our results show that despite district internationalization processes, a non-negligible amount of firms still carry out – in-house or through outsourcing – production activities at district level. Larger firms couple district production and long-term upstream outsourced internationalization activities. The district system confirms its role of pooling specialized competences and product know-how, being decisive for firms’ innovation and responsiveness to national and international markets. Backshoring, instead, is a very limited phenomenon and linked to upgrading strategies.

Developing capabilities in new ventures: a knowledge management approach

On the basis of a knowledge management perspective, this paper expands the literature on new ventures’ capabilities by considering how these firms fill knowledge gaps and develop the technological, marketing, management, and ICT capabilities they need to compete. In particular, this paper investigates the role of networks in these dynamics. Although new technology-based firms have great potential to introduce innovative products into the market, they might suffer from more critical knowledge gaps and capability weaknesses than established firms. The results of a quantitative investigation of an original data set of more than 400 Italian new ventures specializing in high-tech industries show that these firms acquire knowledge to support their capability growth mainly through the management of intense relations with multiple external sources of knowledge. In addition, capability development is supported by the variety of founders’ industry experience and the presence of young graduates among the founding team.

Luxury Firms in China: The Role of Design and Marketing Capabilities

As a growing emerging market (EM), China offers remarkable opportunities for luxury firms from advanced countries. Studies emphasize the global approach to luxury markets, but the uncertainty and cultural distance characterizing the Chinese market increase the risks for firms using standardized global strategies. This article investigates the internationalization strategies of luxury firms in China by exploring the role of design and marketing capabilities. A qualitative methodology is adopted to develop a case study of an Italian company. Design and marketing capabilities emerge as important factors for balancing the advantages of a global strategy while adapting to the unique characteristics of the Chinese market. This process requires dynamic capabilities to maintain coherence with a company’s global brand identity, which is an asset of luxury companies.

Managing knowledge in smart networks

Network technologies offer the opportunity to reshape connections among economic players by increasing the power of customers, makers and knowledge-intensive business firms in innovation processes and value-creation dynamics. Through a theoretical description of the convergence of manufacturing and service offerings, this paper discusses the various conceptions of smart networks and proposes an integrated definition with three key elements: an entrepreneurial strategy, the combination of different networks and orchestrators with a multifaceted absorptive capacity. Based on qualitative research involving two Italian firms, this paper investigates the structures of smart networks, their cognitive and organisational characteristics and the actors that lead them. The paper shows that these firms do not act as network orchestrators in a hub-based model. Rather, they allow the development of innovation activities and the production and combination of new knowledge through web-based technologies and distributed interactive processes among network nodes. Moreover, smart networks are not limited to firms but also involve consumers.

Social Entrepreneurship and Upgrading in Emerging Economies: The Indian Case of Industree and Its Brand Mother Earth

The possibility of realizing production systems which deliver high social, environmental, and economic performance has gained attention in internationalization studies at large. While the literature has focused on large firms from Western countries, we investigate the role of firms from emerging economies (EE) in supporting upgrading and improving the social and economic conditions of local producers while delivering a quality product targeting a sophisticated market niche. This chapter present evidence of an Indian firm specialized in the home and fashion industries (Industree), which successfully improved social and environmental conditions along its value chain through the social entrepreneurship approach. This case study shows that also EE firms can promote social and economic upgrading among their suppliers and that economic upgrading is necessary for the attainment of social upgrading. Design and retail, usually prerogatives of developed country firms, are key factors in supporting the achievement of success in both dimensions.