How do private and publicly-traded R&D service firms differ in their innovation performance and strategy? Evidence from the United Kingdom

R&D service firms (RDSFs) are increasingly recognized as a hidden engine of the UK economy and crucial drivers within the UK's innovation ecosystem, evolving from mere contractors and intermediaries to genuine innovators. Understanding the drivers of their innovation and growth is crucial for catalyzing economic advancement in the UK. Despite their acknowledged importance, research on RDSFs remains nascent, often relying on interviews and case studies without large-scale empirical analysis. This study addresses this gap by comparing the innovation outcomes of private versus publicly-traded RDSFs, reflecting their distinct financial and strategic environments, which influence their innovation trajectories. Using patent and scientific publication data from 2003 to 2019, we provide a robust analysis of the differences in innovation performance, efficiency, and strategic focus between these two categories of RDSFs. Our findings indicate that private RDSFs outperform in patent and publication outputs, exert greater influence on subsequent innovation, and demonstrate superior efficiency and exploration in their innovation process. This study offers critical insights for policymakers and industry leaders to formulate strategies that enhance the innovation impact of RDSFs within the broader UK innovation system.