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Service innovation : new service development with deep involvement of users and value networks

Methlie, Leif B.; Pedersen, Per E.
Research report
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URI
http://hdl.handle.net/11250/165163
Date
2005-11
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  • Reports (SNF) [542]
Abstract
Service innovation has gained interest in recent years and new initiatives have

been taken to integrate product innovation and service innovation research. One

of the reasons service innovation has gained interest is that it includes not only

innovation in service industries, but also service innovation as service

encapsulation of goods and other services. Still, the literature on service

innovation is fragmented and more knowledge is required to develop successful

innovation policies and innovation management practices.

This study investigates the relevance of customer involvement and value

network partnerships in service innovation. Both topics are reviewed in separate

literature studies reported in section 2. From these reviews, sets of testable

propositions are developed. The propositions on customer involvement are

further investigated by analyses of secondary data from the Community

Innovation Survey (CIS-3) and primary data from an empirical study of

customer involvement in the service innovation processes of selected service

firms conducted in 2005. Propositions on value network partnerships are

investigated by two case studies and by comprehensive analyses of the CIS-3

secondary data. The method applied in these studies is elaborated in section 3,

including how new measurement instruments capturing these service innovation

characteristics were developed.

The investigations show that customer involvement has no universal effect on

service innovation results. However, they also show that specific types of

involvement have positive effects on service innovation results and that these

effects are universal to all service firms. Thus, customer involvement may be

used to improve service innovation processes and obtain positive innovation

results, but the specific types of involvement must be carefully chosen to obtain the wanted innovation results. Similar results were found for value network

partnerships, which had a positive effect on innovation intensity for both newto-

the-market and new-to-the-firm innovations, while no general effects were

identified on innovation processes. Supplier cooperation, however, showed a

positive effect on innovation processes intensity. Thus, engaging in specific

cooperative arrangements seems to have positive effects on innovation intensity

and innovation processes, and further detail on these relationships are given in

sections 4 and 5.

This report contributes by the empirical findings reported above and by the other

detailed findings reported in sections 4 and 5. In addition, the theoretically

derived propositions presented in section 2 summarize much of the status of our

knowledge of customer involvement and value network partnerships in service

innovation. Furthermore, the measures developed to capture these elements may

be applied in further studies of service innovation processes and types. The

findings from this report have implications for innovation policy, service

management and service research, suggesting that service innovation differs

from product innovation and requires particular attention by innovation policy

makers. The findings also guide service firm managers in deciding how to

involve customers and engage in value network partnerships to obtain positive

service innovation results and help service innovation researchers in their

development of measurement instruments that better capture the unique

characteristics of service innovation.
Publisher
SNF
Series
Report
2005:32

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