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example, a website (under Medico’s editorial discretion) provided
educational material on brachytherapy treatments (including theirs) and
a public relations firm was contracted to educate public opinion on the
disease. One scientist-member of the team, who had previously worked
as a medical doctor, was solely responsible for abstracting material from
scientific articles to disseminate to the wider community of salespeople
and professionals. To counter the dangers of the ‘isolation’ of the
innovation project within Medico itself, informal, interpersonal networks
were also used extensively by the team. These helped, for instance, to
elicit knowledge from Medico’s USA subsidiary on the development of
the innovation there.
These activities were largely successful in overcoming overt resistance
and a number of new Centres of Excellence were eventually established
within hospitals across Europe. In fact the business was so promising that
Medico set up a separate therapy division, eventually going into partner-
ship with a cancer specialist firm to form a new company.

Indeed, some scholars even argue that ‘material products (e.g. computers,
mp3 players, mobile phones) are themselves only material embodiments of the
services they deliver’ (Dankbaar, 2003, p. 79). It can even be difficult to tell
whether we are actually buying a service or a product – the iPhone is intrinsically
linked to iTunes and 3 Mobile Media, for example.
The implications of the rise in services for managing knowledge work are
extensive. With services innovation, relevant knowledge is nearly always distrib-
uted across a whole range of stakeholders including, on a much greater basis
than before, the customer (Dodgson et al., 2005). Knowledge workers also
need significant autonomy so that they can deal flexibly with more knowledge-
able customers and actively match services to requirements. The deep frustration
that many of us experience when we telephone service companies only to be
met by inflexible, ‘rote’, responses is testament indeed to the need for worker
autonomy. In short, in a service economy, innovation is fundamentally about
managing knowledge and knowledge work (Coombs, 2003; Miles, 2003).
Scholars who write about managing knowledge also often cite innovation as
a key objective. For example, Nonaka’s work on ‘the knowledge creating com-
pany’ (discussed in Chapters 1 and 4) emphasized the need to use knowledge
for innovation. The more recent literature on ‘dynamic capabilities’, similarly,
highlights the importance of developing and managing knowledge processes –
‘experience accumulation’, ‘knowledge codification’ and ‘knowledge articula-
tion’ – in order to generate and modify operating routines in the pursuit of
organizational innovation and improved competitiveness (Bjorkman et al., 2004;
Zollo and Winter, 2002). Indeed, the links between knowledge and innovation,
and the virtue of Knowledge Management for improving innovation, are rarely
questioned in the literature.

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