Services Innovation in Ireland - Options for ... - Europe INNOVA

Figure 2 Examples of Services Located in Various Parts of the Value Chain 39
A core element of services is illustrated by the large dot in Figure 2, which represents the customer
interface. Services offer close interaction with customers, providing opportunities to capture
their tacit knowledge from customers. The capability of a business to diffuse insightful customer
information within its organisation and then initiate effective action including product, service and
organisational development provides a strong basis for improving business performance.
2.3 Defining Services Innovation
Service supplier businesses pursue services innovation in order to retain or improve their competitive
position in the market place. Services innovation refers to new or considerably changed service
concepts or service delivery processes that deliver added value to the client by means of new or
improved solutions to a problem 40 ; methods of improving performance; a desired opportunity for
consumption or consumer services. For a novel feature to constitute innovation it needs to be both
repeatable and scalable. Scalability can be related to the novel service concept or service delivery
process, for instance, franchising.
The key dimensions of services, discussed earlier, provide a basis for a more specific definition of
services innovation:
A new or considerably changed service concept, client interaction channel, service delivery system
or technological concept that individually, but most likely in combination leads to one or more
(re)new(ed) service functions that are new to the firm and do change the service/good offered on the
market and do require structurally new technological, human or organisational capabilities of the
service organisation. 41
The definition emphasises the interactive and multidimensional nature of service innovation. It
also recognises that service innovations are often incremental improvements rather than radical
innovations (Table 2).
39
Adapted from: Kuusisto, J. and Meyer, M. 2003. ‘Insights into Services and Innovation in the Knowledge Intensive Economy’. TEKES
– Technology Review. 134.
40
Tidd, J.; Hull, F. 2003. (eds) ‘Service Innovation: Organizational Responses to Technological Opportunities and Market Imperatives’, London:
Imperial College Press.
41
van Ark, B. and den Hertog, P. 2003. ‘Service Innovation, Performance and policy: A review’, Ministry of Economic Affairs, The Hague,
Netherlands.
Technology
services
Development services
Knowledge intensive
services as carriers and
shapers of innovations
Manufacturing
services
Intermediary services
Purchase, operation, maintenance,
repair support, monitoring
updating and disposal services
17
Services to
customers
End-user services
Customers buy
product-service
packages
Joint problem solving
provides invaluable
feed back information