Study note on service innovation

Study note on service innovation

References with extracted contents

Paton, R.A. and S. McLaughlin. 2008. "Services innovation: Knowledge transfer and the supply chain" European Management Journal 26, Elsevier: 77-83.

"Maintaining a knowledge advantage promotes economic leadership by ensuring that emerging ideas, innovations and viable ‘new’ product and services reach the market place (Bell, 1999; Tidd and Hull, 2003; Karmarkar, 2004). At their core, Western economies are based on services (creation, development and management) and innovation (knowledge acquisition, development and exploitation). Over 75% of the United Kingdom and United States workforce can be classified as belonging to the service sector, with at least 50% of Japanese, German and Russian workers being similarly classified (OECD, 2006)";

"The subject of innovation within services sector industries appears to have, in relation to product driven research and development, been somewhat neglected (OECD, 2005; Hauser et al., 2006). This must be of concern to those Western economic stakeholders. How can one maintain a knowledge led strategy without investing in its acquisition, review and exploitation? Recent years have seen a dramatic growth in the interest shown by both practitioners and academics in the general field of services innovation";

Bettencourt, L.A., S.W. Brown and N.J. Sirianni. 2013. "The secret to true service innovation" Business Horizons 56, Elsevier: 13-22.

"In today’s challenging business environment, however, it is no longer enough to merely deliver a quality service to customers in a timely manner. Instead, companies must find ways to innovate entirely new service offerings that their customers will find valuable. This type of service innovation is not easy to achieve, as the intangible nature of service activity and the active participation of the customer in producing the offering has led to uncertainty about how to innovate new services (Chesbrough, 2005)";

"To truly innovate, firms must expand their shortsighted focus beyond existing services and service capabilities to address the fundamental needs of their customers, including the jobs that customers are trying to achieve and the outcomes that they use to measure success (Bettencourt, 2010; Heskett, 1987). Broadening the strategic viewpoint to encompass the jobs and outcomes that service offerings must help customers satisfy requires active engagement in order to fully understand their needs";

"What companies need is an approach to innovation that enables them to identify opportunities for breakthrough service offerings that is not constrained by current or proposed service solutions. A job-centric approach to service innovation does just that. As the phrasing implies, this approach focuses not on customers’ evaluations of current offerings, but on the job that customers are trying to get done. It looks deeply into why customers presently hire service solutions and then expands this view to consider related customer jobs and more encompassing customer processes (Bettencourt & Ulwick, 2008; Ulwick, 2002)";

Agarwal, R. and W. Selen. 2011. "Multi-dimensional nature of service innovation" International Journal of Operations & Production Management 31(11), Emerald: 1164-1192.

"Many recent studies highlight the need to rethink the way we manage innovation in services and regard them as an interplay of service concepts, service delivery practices, client interfaces, and service delivery technologies (den Hertog, 2000; Miles, 2005). Furthermore, innovations in services are increasingly brought to the market by networks of firms, selected for their unique capabilities, and operated in a co-ordinated manner (Agarwal and Selen, 2011)";

"Previous research has demonstrated that “innovation in service firms goes across firm and industry boundaries” and is not limited to an individual firm. Along the value chain the borders between firms get blurred through outsourcing of service functions, through the use of networks of service professionals, and through mixed project teams in which client and contracting service firm co-produce solutions to problems. Technical engineering firms and information and communications technology (ICT) service firms mostly work jointly with clients to co-produce and sometimes co-innovate. Some service firms even have a reputation for a particular service function that is not directly seen as their core

activity";

"A SVN [service value network] is a network of value chains, which vibrates its essence from the combined core competencies of the stakeholders in the chain, mobilizes the creation and reinvention of value of its assets, requires strategic focus and revives roles and responsibilities amongst different stakeholders";

"Conceptually, a SVN [service value network] influenced by organisational and environmental drivers is all about building and fostering dynamic capabilities to yield a service innovation or “elevated service offering”, one that can only result because of collaborative efforts of the service network partners";

Gallouj, F. 2002. "Innovation in services  and the attendant old and new myths" Journal of Socio-Economics 31, North-Holland: 137-154.

"Services have long been thought to be characterised by low capital intensity, in that they do not require the construction of factories and large-scale production lines. They are also said to be characterised by low productivity and productivity growth (Clark, 1940; Fourastié, 1949; Baumol et al., 1989), a low productivity (and low productivity growth) that may lead to a “cost-disease” (Baumol et al., 1989). The (increasing) introduction of technical systems into service activities has done little to change this perception";

"The definition of innovation as a cumulative and specific process, rather than a disembodied outcome, paved the way for a number of taxonomic studies, aiming to establish sectoral technological trajectories. The most important and highly developed of these works is Pavitt’s taxonomy (1984). In Pavitt’s taxonomy, professional, financial and business services belong for the most part to the category of “supplier-dominated firms” (i.e., supply of instruments and technical systems). The main characteristics of this type of firm are as follows: they tend to be small, have no R-D function and they may have difficulty in appropriating innovation through technical means, which forces them to fall back on non-technical procedures, such as branding, marketing, etc.";

Hipp, C. and H. Grupp. 2005. "Innovation in the service sector: The demand for service-specific innovation measurement concepts and typologies" Research Policy 34, Elsevier: 517-535.

"Many innovations in the service sector use technological developments merely as a means of creating new and improving existing products and processes rather

than just offering pure technological progress";

"The innovation survey shows that the structure of expenditure in service companies differs considerably from that of manufacturing firms. About 17% of all innovation expenditure is spent on internal and outsourced R&D (cf. Fig. 4). Product launches, conception of new services, and patents and software make up more than a third of all expenditure. Almost a fifth is spent on employee’s qualifications (confirming the legitimacy of the human capital approach in Section 2). The highest expenditure, however, is investment in machines and physical resources, requiring on average about one quarter of all the innovation expenditure";

Gallego, J., L. Rubalcaba and C. Hipp. 2013. "Services and organizational innovation: the right mix for value creation" Management Decision 51(6), Emerald: 1117-1134.

"Services are a transformative source and the key to competitive advantage in the business arena of the twenty-first century (Teboul, 2006). The introduction of new service functions or service innovations contribute towards changing traditional value chains through, for instance, the provision of new service delivery channels (e.g. internet-based customer interfaces that facilitate a worldwide service offering) or the outsourcing of activities (e.g. server and router infrastructure, ICT maintenance); the latter allowing firms to concentrate on their core competencies and primary business activities";