Innovation in Services - Department for Business, Innovation and Skills

Innovation in Services
product changed significantly (i.e., distinct service innovations are harder to
identify than distinct goods innovations, and service innovation is likely to
involve more continuous or wave like change than the stepwise improvement
model associated with innovation in goods). Service processes are not all
internal to the firm – for example, a delivery process is a ‘service product’, which
creates difficulties with the widely accepted dichotomy of product and process
innovation. Beyond this there is also confusion as to how to differentiate
between process and organisational innovation in services.
By studying innovation in a variety of services from cleaning to knowledgebased
services such as management consulting, this line of research rejected the
centrality of ‘technological innovation’, and instead emphasised organisational
innovations and innovations in work practice. Indeed, Sunbo (1997) suggests
that the traditional focus on R&D based technological innovation represents
something of a special case, 9 whereas innovation in most of the economy
(including most services) is strategically determined (i.e., the firm’s strategy is
the core determinant of innovation) rather than its technological position. Whilst
many strategically determined innovations are facilitated by technologies, their
development does not necessarily depend on leading-edge technologies or on
holding a technological advantage over competitors, and therefore the role of
‘hard’ technologies is less prominent than in the technology-producing
manufacturing sectors that have been the primary focus of most innovation
research.
The distinction researchers argued the need to move away from narrow
technological definitions of innovation, and that merely adapting conceptual and
empirical tools developed with technology-based manufacturing in mind, as had
been done by those working in the assimilation tradition, was inappropriate.
Instead, they called for the development of conceptual and empirical tools that
are more sensitive to the peculiarities of services – and in particular their
intangibility, their high dependence on people, and high levels of interaction
(Tether 2005). Some ad hoc large scale survey work has been undertaken in this
tradition, notably in France by Djellal and Gallouj (1997).
9 He also identifies innovation through entrepreneurship (and intrapreneurship) as another special case.
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