The Impact of Innovation on Performance in Services: Disentangling Effects Through the Lenses of Intellectual Capital

Service firms have long been neglected in innovation studies. The growing importance of service industries and the blurring boundaries between manufacturing and service industries suggest that understanding the dynamics of innovation in services is essential for economic welfare. This paper argues that the most commonly reported features of innovation in services indirectly refer to the concept of intellectual capital. Accordingly, it is contended that adopting an intellectual capital perspective may provide interesting insights to illuminate the firm-level effects of innovation on performance in service firms. So far, attempts to systematically review and integrate the literature on the impact of innovation on performance from an intellectual capital perspective are, to the best of our knowledge, nonexistent. This paper precisely aims to analyze the existing literature from this perspective, considering both the input and the output perspectives of the innovation process. In doing so, it provides an intellectual capital oriented framework to capture the distinctive features of innovation in services and hence contributes to the scarce stream of literature focusing on identifying and quantifying the impact of innovation in an overlooked economic sector.