ABSTRACT
The expansion in service-sector R&D is in large part due to an increasing dependence by large firms on outsourcing as the vehicle for accomplishing innovation in products and production (Amable and Palombarini, 1998; Howells, 1999; Jankowski, 2001; Pilat, 2001). Outsourcing is a common approach for conducting research in areas of interest that require expertise outside of a firm’s core competencies. As of 2000, engineering and scientific contract research accounted for between 5 and 12 percent of industrial R&D in most industrial economies (OECD, 2001b).
