Making a profit with R&D services — The critical role of relational capital

Services are expected to become the key source of profit and competitive advantage for industrial firms in the transition from product business to customized and integrated solutions. At the core of this transformation are complex and knowledge-intensive R&D services that enable the customization of solutions, and particularly the relational capabilities needed for R&D service interactions. However, little research has been conducted on the profitability of suppliers' R&D services and the factors that facilitate profit generation from such complex and knowledge-intensive services. Our primary aim is to identify the factors that influence the relationship between R&D services and suppliers' profit performance in customer relationships. Using data from 91 supplier–customer relationships, the study demonstrates how the relational form of social capital (relational capital) facilitates the profit impact of R&D services in the supplier–customer relationship. The results contribute to the study of industrial servitization, R&D service interactions, and the factors that facilitate financial value creation via complex and knowledge-intensive services by industrial suppliers. The results enhance the study of service networks, R&D collaboration, alliance capabilities, industrial marketing, and inter-organizational networks.