Defusing Digital Disruption Through Creative Accumulation: Technology‐Induced Innovation in Professional Service Firms

Abstract How will digitalization change the future of work in professional service firms (PSFs)? And how can they adapt to new technology and avoid potential disruption? Building on an interview study in the Big Four auditing firms in Sweden, we contribute to research on the future of work in PSFs by unpacking the process through which PSFs expand their domain of expertise towards technology and complement competence‐destroying innovations with competence‐enhancing innovations. They do so by engaging in a process of ‘creative accumulation’ through ‘competence expansion’, consisting of three overlapping sub‐processes – skill acquisition, skill dissemination, and skill integration – and intertwined cycles of service, process, and organizational innovation. We also contribute to the literature on innovation in PSFs by contradicting the view of PSFs as inert and technology‐avert. Instead, we show how they proactively engage in both top‐down and bottom‐up technology‐induced innovation to reshape their work and defuse the threat of digital disruption.