Impacts of obstacles on innovation patterns in KIBS firms

Factors that impede the innovation propensity of manufacturing firms have been under-studied and under-documented. Obstacles to innovation in KIBS firms are literally not documented at all. Based on a sample of Canadian KIBS firms, this study argues that in KIBS firms, the propensity to innovate should take into account not only product and process innovations, but also other forms of innovation (delivery, strategic, managerial, and marketing). Furthermore, we argue that different obstacles will affect different forms of innovation. The results show that, overall, financial obstacles are negatively related to product and process innovations, and that knowledge obstacles tend to be negatively associated with delivery, strategic, managerial, and marketing innovations. These results carry important managerial implications. Hence, managers of KIBS firms might benefit from remembering that a failure to recognize the differences between KIBS firms and manufacturing firms could lead to an inefficient allocation of the resources invested in innovation activities.The authors would like to gratefully acknowledge the financial support for this research from the Social Sciences and Humanities Research Council of Canada (grant number 410-2005-0501).Peer Reviewe