An integration framework of innovation assessment for the knowledge-intensive service industry

1. An integration framework of innovation assessment for the knowledge-intensive service industry 指導老師：張菽萱 教授 研 究 生：王慧珍 學 號：94312035

2. Abstract 1.This study tries to explore the nature of the KISI and the concept of innovation measurement. 2.We suggest the three dimensions of the assessment – capability, behaviour and performance – as the basic conceptual building stones linking the system view of innovation and the target-KISI- to establish an integration framework.

3. Introduction • 1. This study tries to explore the nature of the KISI and by combining it with the concept of innovation measurement, to establish an integrated framework that has a solid rationale and a good reflection of the industry reality.

4. Scope of knowledge-intensive service industry (1) • 1. The OECD defines the knowledge-intensive service industry as one that has more knowledge input than other industries, which is measured by the major expenditures for education and training, R&D, and IT software, etc. • 2. The scope of the knowledge-intensive service industry includes traditional technology service industries, technology services in emerging industries, and service activities behind the manufacturing industry.

5. Scope of knowledge-intensive service industry (2) • 3. The unique characteristics of KISI may be concluded as: operations based on knowledge input, knowledge application, and other knowledge flows, market differentiated by types and functions of the service provided. • 4. Therefore, knowledge itself, knowledge flows, and functional values of knowledge are the three major dimensions of the development space of KISI.

6. Concepts of innovation and innovation assessment (1) • 1. Peter Drucker defined innovation as a new and improved way of using resources to produce wealth, and he also manifested that innovation was a major function of enterprises, and the mission of every department within the business entity. • 2. We may characterise innovation as a new (improved) production factor system, which introduces (relatively) new products into the market to generate better value by complicated technology, professional networks or creative processes.

7. Concepts of innovation and innovation assessment (2) • 3. It means that production factors and capability, behavioural activities, and performance value are not only the three major foucdation stones of the innovation concepts, but also the three major facets on which the innovation assessment is based and reflects, as shown in Figure1.

9. Knowledge-contained entity (1) • 1. It means that knowledge is the primary resource of economic activities, and that knowledge-service industry is the entity that contains this resource. • 2. The static model reflects how to acquire and store knowledge resource to a certain quantity to satisfy the demand in an economic production system.

10. Knowledge-contained entity (2)

11. Knowledge-contained entity (3) • 3. The HR (human resource) capital, organizational capital, and relationship capital of intellectual capital may be seen as the media used in measuring knowledge stock and flow. • 4. These factors include patents, information system, networking systems, licensing agreements, business collaborations, and other internal or external structural indexes.

12. Knowledge-manipulation mechanism • 1. Based on the system theory, the knowledge-manipulation mechanism could be conceptualised into input, process, and output. • 2. The input concept reflects what the enterprise has committed to the knowledge-manipulation system, and the process concept reflects how to manipulate it; the output concept show what and where to contribute valuable results from the manipulation.

14. Integration of industry nature and assessment dimensions of innovation • 1. We could find that: the measurement of capabilities is reflected on the stock volume of the knowledge entity, as well as the input of the knowledge-manipulation mechanism: the measurement of behaviour aspect in reflected on the flow of knowledge and the process of the knowledge-manipulation mechanism; the measurement of performance is reflected on the growth of the knowledge and the output of the knowledge-manipulation mechanism.

16. Capability assessment of innovation in the KISI • 1. From the view of the manipulation mechanism, capability means the input resource for yielding results when being realistically manipulated. • 2. The higher the degree of input to be manipulated, the more the anticipated results, and the greater is the potential.

17. Behaviour assessment of innovation in KISI • 1. The process of innovation activities, and the method of innovation behaviour confirm the efficiency of actually transformed resource input. • 2. The knowledge-manipulation process reflects the value chain of enterprise, also directly link to the industry dynamics.

18. Performance assessment of innovation in KISI • 1. The performance aspect goes beyond the system to measure concrete contributions of behaviours from higher hierarchy or an external environmental point of view. • 2. The performance viewpoint of the integration framework makes the assessment linking to the industry dynamics, providing information to reflect the enterprise’s mindset of market segmentation and to examine its positioning strategy in the overall competitive arena.

19. Applying the framework-innovation assessment of ITRI The integration framework established in this study is based on three dimensions of assessment- capability, behaviour, and performance- to integrate the following three aspects: • 1. combining intrinsic knowledge view of the industry • 2. providing the system view of the innovation concept • Providing a basis for explanation of assessment results

20. http://www.ccl.itri.org.tw/ccl.asp

21. Assessment results and its management implications • 1. The results from capability assessment are positive, show that ITRI indeed has a high innovation potential. • 2. In the behaviour analysis aspect, there were some lacks of knowledge regarding flow-oriented activities because in the area of patents, they are abundant in quantity, but there are not many sings of related activities to highlight the patent’s potential and value. • 3. In the performance aspect, the measurement of human resource-related factors showed more significant contributions but it is implicit in the marketing and productivity factors

22. Strategic implications and improvement direction • 1. The insufficient patents commercialisation could be due to the lack of cross-department integration of the research outputs, especially the integration of R&D and marketing. • ITRI, like most nonprofit entities, is faced with basic problem: the conflict requirements of two markets- the contributors and the clients.