Innovation in services: a review of the debate and a research agenda

Abstract

The paper reviews the debate on innovation in services which has flourished over the last 20 years and suggests a research agenda for the services innovation literature. We discuss whether, and the extent to which, the ill-definition and mis-measurement of service output have influenced the conceptualization and analysis of innovation in services. We propose a reclassification of the literature according to whether it has been mainly assimilated or differentiated with respect to the traditional conceptualization of innovation in the manufacturing sector. We also review the integrative (or synthesizing) contributions, and suggest a taxonomy for the modes of innovation in services, based on the Lancasterian characteristics-based approach to product definition. We conclude with a summary of the key arguments and a proposed agenda for the evolutionary theory to integrate the conceptualization of innovation in services.

The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms

“…Despite the limited research on innovation in services (Hipp 2010), three schools of thought have emerged: assimilation, demarcation, and synthesis (Coombs and Miles, 2000, Tether, 2003Gallouj and Savona, 2009). The first school, the assimilation approach, is characterized by an attempt to study innovation in services using the theories and concepts developed for understanding innovation in manufacturing (Salter and Tether 2006).…”

“…Within this trajectory of research, services play a "subordinate role" in innovation (Djellal and Gallouj 2010) and are just passive adopters of externally produced technologies (Tether and Hipp 2002). The second school of thought, the demarcation approach, argued that innovation in services is different to innovation in manufacturing and that new theories and approaches are needed in order to understand the distinctiveness of services innovation (Tether, 2003;Salter and Tether, 2006;Gallouj and Savona, 2009). This line of work tried to lessen the importance of technology in services innovation and called for new conceptual tools that are more sensitive to the intangibility, high dependence on people and interactivity of services (Salter and Tether, 2006).…”

“…The study probes the potential context dependency of the effect of age on innovation by comparing services with manufacturing firms. In doing so, we bring together the literatures on age and innovation 4 with the emerging understanding of the nature of innovation in services, focusing on coterminality, intangibility and low capital intensity as drivers of differences in performance outcomes (Coombs and Miles 2000;Gallouj and Savona 2009;Tether 2003aTether , 2005.…”

“…The third school of thought, the integrative approach, has argued that services and manufacturing do not follow entirely different approaches and that some aspects of services can also be used to understand the rest of the economy (Droege et al 2009;Gallouj and Savona 2009;Tether 2003a). This approach has come about from the increasing bundling of services and manufacturing into solutions (Howells 2004) and from some similarities between services and manufacturing that have not been properly conceptualized (Howells 2010).…”

Service Innovation in Industrial Contexts

“…On the other hand, a synthesis or integrative perspective to innovation has recently gained major ground among service innovation scholars (Carlborg et al 2014). Synthesis-focused research aims to integrate insights from manufacturing-oriented and service-oriented research to advocate a unified perspective on innovation (Coombs and Miles 2000;Gallouj and Savona 2009).…”