Innovation in Services - Department for Business, Innovation and Skills

Innovation in Services
skills it is notable that very few people receive any formal training in innovation
management, yet it is often argued that innovation management requires a
broader mix of skills than is provided by traditional, disciplinary based
approaches. With workforce skills we note that the tradition within Western
education and training systems has been to encourage high degrees of
specialisation. Whilst such specialisation is necessary it is arguably increasingly
insufficient, particularly where people need to interact and inter-relate in the
course of their work. In other words, workers, especially in services and
innovation-related service work, increasingly need to combine a depth of
knowledge in a particular area with a breadth of knowledge and
communications and team-working skills which allow them to effectively interrelate
with others from other specialisations.
Thirdly, innovation research and policy has been dominated by the supply side,
and especially the supply of technologies. Evidence shows that in services the
supply of technologies is not the most significant barrier to innovation; by
contrast the survey suggests demand is a more important determining factor.
Here, government and the public sector may have a significant role to play,
through the public procurement of goods and services.
2.1 Introduction 3
Despite the dominance of services in economic activity in the UK and other
advanced economies, prior to the 1990s relatively little attention was paid to
innovation in services. This paper has three main objectives. Firstly, to review
how the understanding of innovation in services has changed over time, from an
understanding focused on technological adoption to an understanding based on
complementary changes to technologies, skills and organisation (Section 2.2). In
association with this changing conceptualisation, we also discuss the
development of approaches to measuring innovation, particularly in services
(Section 2.3). Secondly, we explore empirical evidence of these innovation
complementarities in services through a unique data-set of European service
firms active in four contrasting service sectors (Section 2.4). Lastly, we provide
some reflections on this review and analysis in relation to its implications for
research and policymaking with regard to innovation in services (Section 2.5).
3 We are grateful to the comments of Dr Ray Lambert, Catherine Connolly and participants at the DTI’s Conference
on Innovation in Services (15th November, 2006) that have improved this paper. The view expressed are those of
the authors, and do not necessarily reflect the views of the DTI or its officials.
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