Introduction to service innovation

Service innovation – the Cinderella of innovations? 27.11.09 Per Egil Pedersen, per.pedersen@nhh.no

Service innovations – the Cinderella of innovation? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

1. Background and recent interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Recent interest in these issues…

2. Services and service ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

2.1 Services and service – different meanings ,[object Object],[object Object],[object Object]

Services as service industries ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Services as knowledge intensive services 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Services as knowledge intensive services 2 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Services as value added services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Servitization (Oliva and Kallenberg, 2003) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Examples ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

2.2 Characteristics of services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Characteristics 1 (Copyright IBM, Almaden) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Characteristics 2 (Copyright IBM, Almaden) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Critique (Lovelock and Gummesson, 2004)

2.3 Service dominant logic ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

3. Service innovation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Service innovation as innovations in service industries ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Service innovation as innovations in service industries, cont… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Service innovation as innovation in knowledge intensive services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Service innovation in goods producing industries ,[object Object],[object Object],[object Object],[object Object],Services Manu- facturing Financial growth Focusing Not focusing Significant diff Costs 0,18 mill pr emp 0,30 mill pr emp Yes Sales 0,22 mill pr emp 0,14 mill pr emp Yes Results 0,027 mill pr emp 0,016 mill pr emp No Financial growth Focusing Not focusing Significant diff Kostnadsvekst 0,16 mill pr emp 0,14 mill pr emp No Salgsvekst 0,19 mill pr emp 0,15 mill pr emp Yes Resultatvekst 0,028 mill pr emp 0,020 mill pr emp Yes

Example, product / service ecologies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Characteristics of services – implications for innovation Service characteristics Impact on organization of innovation process Intangibility Need for intensive communication between people involved in innovation, because new product cannot be felt or touched. Creating shared understanding is of highest importance Simultaneous production and consumption Close involvement of front and back office personnel is needed, largely due to simultaneous development of production process Heterogeneity No impact; physical products may also be heterogeneous Perishability No impact; new services can be developed in advance

Characteristics of service innovation – a framework

Conditions characteristics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Process characteristics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Just for fun… Serious business…

Example, path of innovation for a service innovation– Aker Well Service ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Innovation type characterstics ,[object Object],[object Object],[object Object],[object Object],[object Object]

Example- Immaterial services ,[object Object],[object Object],[object Object],[object Object],[object Object]

Results/effects characteristics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Service innovation process Business process effects Capability effects Relationship effects External effects Financial performance effects Competitiveness effects

Service dominant logic and innovation ,[object Object],[object Object]

Summary and conclusions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Introduction to service innovation

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Introduction to service innovation