Innovation Modes in the Swiss Service Sector: A Cluster Analysis Based on Firm-Level Data

Despite the importance of the service sector, our knowledge of innovative activities in services is still rather poor. From this perspective, a first aim of this paper is to contribute to a better understanding of innovation patterns prevailing in this sector. To this end, firms which are similar in terms of a large set of innovation indicators have been grouped into clusters. For the Swiss service sector, we identified five clusters which clearly differ with respect to a large number of innovation-related factors (knowledge networks, appropriability, technological opportunities, market conditions, etc.) and some structural properties of firms (size, age, industry affiliation, export orientation). The clusters may thus be interpreted as specific „modes of innovation“. Secondly, we investigated whether the five innovation modes are „economically equivalent“, what would imply that unordered classifying of similar firms is more appropriate than (the frequently practised) ranking of industries according to their innovation intensity. The empirical results are not clear-cut: Although the evidence supports the classification approach quite well, the ranking procedure cannot be refuted. This ambiguous result can be interpreted as follows: On the one hand, in accordance with the classificatory perspective, firms dispose of a certai