Managing Knowledge and Co-creation in Service Innovation: The Case of the Advertising Industry

  • Fengjie Pan

Student thesis: Phd


Research focusing on service innovation has seen a significant growth in the last two decades, yet the research on KIBS innovation - and especially on innovation in the creative industries, like advertising - remains rather limited. Due to the increasingly competitive business environment, how KIBS firms co-create with their clients to develop more innovative products or services is becoming more important. Therefore, this research uses the UK advertising industry as a basis to explore the nature of advertising innovation, the service innovation process and the co-creation within it, and how KIBS project innovativeness influences new service development. The literature on service innovation, co-creation and innovativeness involved in developing services or products provides the theoretical foundation for this research. It uses multiple case studies methodology and is based on 45 interviews with advertising managers. The findings of this thesis can be divided into three key areas. First, this study conceptualises the advertising innovation and advertising innovation dimensions and identifies the importance of content innovation and two-sided interface in advertising innovation. Second, the innovation process in the advertising industry can be divided into five phases: the problem diagnosis phase, the creative process, the production phase, the commercialisation phase, and the evaluation and learning phase. (In more detail, the innovation process can be divided into fourteen development stages: client brief, understanding client business, problem diagnosis, strategy planning, creative briefing, idea generation, idea testing, idea selection, idea amplification, production, testing, launch, evaluation, and learning.) This research examines what is meant by co-creation, and identifies how co-creation changes over the course of the service innovation process - where co-creation activities and tasks, and the roles of service firms and their clients, vary across stages of service production. It finds that co-creation between advertising companies and their clients follows a 'W-shaped' curve pattern, with the most intense co-creation in the problem diagnosis phase and the least in the production phase. (The practitioners in these KIBS assert that having too much co-creation activities in the idea generation stage tends to develop uncreative ideas.) Third, as the tasks of KIBS are to fuse generic knowledge with local and special knowledge related to specific problems, to develop problem solutions for their clients, this study conceptualises KIBS project innovativeness as involving two parameters: (1) the knowledge and experience of the problem itself (which relates to problem novelty); (2) the knowledge and experience of developing innovative solutions (solution innovativeness), and explores how KIBS project innovativeness influences new service development. Based on the analysis of KIBS project innovativeness, this study develops a typology of project development in KIBS firms, which includes four types of projects: routine project, new project, solution-led project, and innovative project. This research contributes to understanding the nature of service innovation and co-creation by providing a more thorough understanding of the role of co-creation in the overall new service development process. It also shapes our understanding of KIBS project innovativeness and how it influences new service development.
Date of Award1 Aug 2019
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorIan Miles (Supervisor) & Hugh Cameron (Supervisor)


  • Innovation process
  • KIBS project innovativeness
  • KIBS
  • Service Innovation
  • Co-creation

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