Business innovation

The concept of service Innovation was first discussed in Miles (1993) and has been developed in the past two decades. It is used to refer to many things. These include but not limited to:

The Finnish research agency TEKES defines service innovation as the following: "Service innovation is a new or significantly improved service concept that is taken into practice. It can be for example a new customer interaction channel, a distribution system or a technological concept or a combination of them. A service innovation always includes replicable elements that can be identified and systematically reproduced in other cases or environments. The replicable element can be the service outcome or the service process as such or a part of them. A service innovation benefits both the service producer and customers and it improves its developer’s competitive edge. A service innovation is a service product or service process that is based on some technology or systematic method. In services however, the innovation does not necessarily relate to the novelty of the technology itself but the innovation often lies in the non-technological areas. Service innovations can for instance be new solutions in the customer interface, new distribution methods, novel application of technology in the service process, new forms of operation with the supply chain or new ways to organize and manage services."

A comprehensive definition of service innovation was proposed by Van Ark et al. (2003): "A new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more (re)new(ed) service functions that are new to the firm and do change the service/good offered on the market and do require structurally new technological, human or organizational capabilities of the service organization." This definition covers the notions of technological and non-technological innovation. Non-technological innovations in services mainly arise from investment in intangible inputs.

Many literatures on what makes for successful innovations of this kind comes from the New Service Development research field (e.g. Johne and Storey, 1998; Nijssen et al., 2006). Service design practitioners have also extensively discussed the features of effective service products and experiences. One of the key aspects of many service activities is the high involvement of the client/customer/user in the production of the final service. Without this co-production (i.e. interactivity of service production), the service would often not be created. This co-production, together with the intangibility of many service products, causes service innovation to often take forms rather different from those familiar through studies of innovation in manufacturing. Innovation researchers have, for this reason, stressed that much service innovation is hard to capture in traditional categories like product or process innovation. The co-production process, and the interactions between service provider and client, can also form the focus of innovation. A growing number of professional association have service sections that promote service innovation research, including INFORMS, ISSIP, and others.

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Wikipedia