5. Discussion
5.1. Theoretical contributions
An increasing number of firms, both service providers and firms offering combinations of products and services, are turning to the innovation literature for help in designing effective service innovation processes. Indeed, the “hybrid” product-service firms are perhaps the most interesting, since they represent both the current complexity of innovation in B2B firms and, as cited in the popular press, the future of B2B innovation. Indeed, this analysis shows that these hybrid firms are slightly more higher-tech, spend more on R&D and spend more on radical innovation, supporting these popular press contentions. This study produces six contributions to extant theory on product/service innovation, including demonstrating support to our overarching hypothesis that B2B service innovation is less sophisticated than B2B product innovation.
5.1.1. The current innovation practices of B2B firms and B2C firms are very similar
Our sample consisted of 243 B2B and 129 B2C firms. Their innovation practices are very similar in: innovation-supporting cultures (in both attitudes towards risk and actively managing for innovation), innovation strategies, innovation revenue goals (goal size and number of years), percentages of sales spent on R&D, R&D allocations across products and services and across radical, more innovative and incremental projects, innovation processes, and intellectual property protection. The only empirical differences between B2B and B2C firms are that B2B firms are less likely to have an innovation strategy or to use innovation revenue growth targets, and they are less efficient in eliminating less promising innovation projects during the early stages of idea screening and business analysis.