Innovation in Services - Department for Business, Innovation and Skills

Innovation in Services
A third ‘Distinction’ phase emerged in the 1990s, which was more radical in its
approach and sought to reject the centrality of ‘technological innovation’ that
had been the focus of most innovation studies. Instead it focused on
organisational innovation, and innovation in knowledge-based services, where
the role of formal R&D and ‘hard’ technologies is less prominent than in the
technology-producing manufacturing sectors. The approach therefore drew on
and highlighted the ‘peculiarities of services’ and how services, and their
innovation activities, differ from archetypal manufacturing.
The last ‘Synthesis’ approach began with agreement that the study of innovation
should combine analysis of both technological and non-technological forms of
change, but also that this broader vision of innovation has as much relevance for
manufacturing and other sectors as it has for services. In essence, researchers
adopting this approach recognise the importance of both technological and nontechnological
(and especially organisational) forms of innovation, and indeed the
interactions and complementarities between these two forms. As such, they seek
to develop insights that are relevant to the whole economy, not just services.
These changing understandings have been associated with changing
approaches to the measurement of innovation. The ‘Neglect’ and ‘Assimilation’
perspectives are largely interested in patterns of R&D activities and patenting.
As most services do little of these they were considered marginal players in
innovation. The development of the European Community Innovation Surveys
(CIS) since the early 1990s has however revealed more innovation in services
than was hitherto appreciated. The ‘Distinction’ and ‘Synthesis’ approaches both
call for the development of a wider understanding of innovation, in which the
measurement of organisational change is given equal status to the
measurement of technological change, but as yet these perspectives are poorly
served by appropriate measurement tools.
We use one survey designed in the synthesis tradition to give insight into
innovation in services in the empirical section of this paper. The survey included
over 900 European service firms active in four contrasting sectors: road
transport, call centres and information processing, care for the elderly and
design activities. Exceptionally, the survey was designed to explore the extent of
changes to skills and organisation on the same basis as technological forms of
innovation.
The survey found that the most widespread change was to the technologies
used to produce or deliver services. But firms also claimed widespread change
in other dimensions: over a third claimed their products or services had changed
completely or significantly, and a similar pattern was found for changes to the
means of producing services, to the skills deployed, and to the firms’
organisational structures. Overall, the important finding here is the similarity
between the level of change to technologies, skills and organisational
arrangements, as well as to the services provided and the means of providing
them. These similarities hint at connections or complementarities between these
various dimensions of change.
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