Factors affecting improved innovation output in service sector firms

The intention of this paper is to investigate the innovation outcomes associated with systems of new HRM practices and newly implemented technology in the service sector. We seek to find systems of mutually reinforcing HRM and technology practices that are conducive to innovation in terms of new/improved products and processes. Realizing the complementary nature of various types of HRM practices, we investigate whether technology has a similar complementary relationship with such practices. This paper follows closely with the work of Laursen and Foss and Michie and Sheenan; extending the number of HRM variables and integrating technology variables similar to the studies of. Similar to Laursen we stress sectoral differences in the application of these practices and consider the impact of any systems of complementary practices on 14 industries as defined by the WES survey. In this paper, we present the findings for two representative industries; publically funded education and healthcare, and the competitive market-driven financial sector.