This is a study of innovation in Knowledge Intensive Business Services (KIBS) and the impact innovation has on employment. The thesis relies on theories within the fields of "innovation in services", in particular KIBS, and "innovation and employment", taking as its point of departure the taxonomy of product and process innovation. The thesis is based on a discussion of innovation in services with a focus on how innovation in services may be understood and delineated. A long discussion is dedicated to the taxonomy of product and process innovation and the extent to which these concepts may be applicable to innovation in services. The thesis also scrutinises the concept of KIBS and how this can be defined. It further discusses features commonly associated with KIBS firms. The thesis is also rooted in the broader issue of innovation as a creator and destroyer of employment and makes a contribution in applying these issues to service sectors. The empirical part of the thesis builds on a database compiled for the research project, comprised of 967 Swedish KIBS firms. The database covers issues of innovation, employment and characteristics of the firm. The findings indicate that innovation was common in Swedish KIBS firms and that innovations often had an impact on employment. However, the thesis did not detect a straightforward relation between type of innovation (technological process innovation, organisational process innovation, goods product innovation and service product innovation) and the impact on employment. Explanations other than type of innovation have to be considered to analyse the impact of innovation on employment. The thesis further suggests that although innovation in KIBS is common, innovation itself is difficult to conceptualise and delineate.

The purpose of this study was to explore key factors to consider for a Swedish Knowledge Intensive Business Services (KIBS) firm to successfully enter the Norwegian market, and examine how these factors compare to incumbent theories on foreign market establishment. The study is based on an interpretivist research design and utilizes qualitative methods in order to achieve the intended purpose. The empirics were gathered by a combination of methods, namely, an extensive literature review, a pilot-study, and a multiple-case study. The data gathering methods utilized in the pilot study were semi-structured interviews conducted with individuals with expertise in the KIBS environment, as well as participant observations. The pilot study resulted in a deeper understanding of the KIBS sector. The multiple-case study consisted of semi-structured interviews with Swedish KIBS firms that have entered the Norwegian market. The empirics have been analyzed and discussed in relation to existing literature. Consequently, several success factors and pitfalls have been identified that may aid an internationalizing firm, especially a Swedish KIBS firm entering the Norwegian market. The identified success factors were: Narrow your focus through relational embeddedness, Understand customer’s business, Educate customers, Become familiar with foreign laws, Be aware of network position, Exploit existing networks, Identify new relevant networks, Refresh and expand the network, and Ensure relational embeddedness with key actors. The identified pitfalls were: Underestimation of time and resources required, Lacking awareness of aggravating effects, Knowledge transfer problems, Failure of internally anchoring foreign ventures, Underestimation of the language barrier, Underestimation of differences in organizational structures, Underestimation of the cost of spatial distance, Underestimation of Patriotism, and Underestimation of loyalty to suppliers. Moreover, the study provided insights as to how the concepts of liability of foreignness and liability of outsidership might interplay, and thereby exert pressure on a firm's dynamic internationalization capabilities in the foreign market establishment process. As such, the need for firms and researchers to undertake a holistic view in order to avoid faulty conclusions has been discussed and visualized. / Syftet med denna studie var att utforska nyckelfaktorer för svenska KIBS-företag som vill expandera till den norska marknaden. Vidare analyserades det hur dessa faktorer relaterar till befintliga teorier inom marknadsetablering. Studien är baserad på en forskningsdesign där kvalitativa metoder används för att uppnå syftet. Empirin är insamlad via en kombination av metoder, nämligen en omfattande litteraturstudie, en pilotstudie och en flerfallsstudie. Datainsamlingsmetoderna som användes i pilotstudien var semistrukturerade intervjuer med personer som har erfarenhet inom KIBS-miljön och även deltagarobservationer. Pilotstudien resulterade i en djupare förståelse av KIBS-sektorn. Flerfallsstudien bestod av semistrukturerade intervjuer med svenska KIBS-företag som har expanderat till den norska marknaden. Empirin har analyserats och diskuterats i relation till befintlig litteratur. Utifrån analysen identifierades flertalet framgångsfaktorer samt fallgropar. Genom att belysa dessa faktorer underlättas internationaliseringen för företag, i synnerhet för svenska KIBS-företag som vill expandera till den norska marknaden. De framgångsfaktorer som identifierades var: Begränsa sin fokus genom relationell inbäddning, Förstå kundens verksamhet, Utbilda kunder, Bli bekant med utländska lagar, Var medveten om nätverksposition, Utnyttja befintliga nätverk, Identifiera nya relevanta nätverk, Uppdatera och utöka nätverket och Säkerställa relationell inbäddning med nyckelaktörer. Medan de fallgropar som identifierades var: Underskattning av tid och resurser, Bristande medvetenhet om försvårande effekter, Kunskapsöverföringsproblem, Misslyckande med att internt förankra utländsk satsning, Underskattning av språkbarriären, Underskattning av skillnader i organisationsstrukturer, Underskattning av avståndskostnader, Underskattning av patriotism och Underskattning av lojalitet mot leverantörer. Vidare har det argumenterats för att det finns ett samspel mellan koncepten liability of foreignness och liability of outsidership som sedermera sätter press på ett företags dynamiska internationaliseringsförmågor. Följaktligen har det även visualiserats samt diskuterats att företag och forskare bör vidta ett holistiskt synsätt för att undvika att dra felaktiga slutsatser i internationalseringsprocesser.