April and May 2014 issues

The guest editors for the April and May TIM issues, are Marja Toivonen (VTT Technical Research Centre of Finland), Risto Rajala (Aalto University), altogether from RESER and Mika Westerlund (Carleton University), Some of the papers were presented at the 2013 reser conference in Aix en Provence (France)

The theme of this issue (and the May 2014 issue that will follow it) is Service and Innovation – a topic having origins in the 1980s but putting forward many new perspectives. The topic derives from two main schools of thought: marketing and management on one hand, and general innovation studies on the other. Until recently, these two schools have developed apart from each other, but today we witness an increasing convergence between them. Moreover, synthesizing views are gaining ground, in many cases at the expense of old dichotomies: science push and demand pull are both seen as necessary drivers of development; technology and human resources are considered equally important as sources of competitive advantage; and providers and users are increasingly analyzed as co-creators of value.

The research into service development and innovation has become more versatile including, for instance, topics such as open innovation, the perspective of service systems, and the relationship between internationalization and innovation. The articles in this issue represent studies carried out mainly in European countries, but having linkages to other areas, such as the Middle East and China. Content-wise, the topics include many issues that are widely generalizable, irrespective of the geographical area.

In the first article, Rabeh Morrar from An-Najah National University in Nablus, Palestine, reviews the literature on service innovation. Given that service activities play an increasingly prominent role in all economic exchange, innovation in the service sector is of mounting importance for all economic actors. Also, they are imperative for entire societies. Building on the widely-used distinctions among service innovation activities introduced by Coombs and Miles in 2000 and Gallouij in 2010, the study depicts the specificities of assimilation, demarcation, and synthesis approaches to service innovation. Moreover, the article discusses the economic outcomes of different service innovation activities. In doing so, the study provides helpful guidance for understanding the progression of service innovation research.

In the second article, Marit Engen and Inger Elisabeth Holen from Lillehammer University College, Norway, combine three important viewpoints in innovation studies: R&D-based innovation, employee-driven innovation, and user-driven innovation. The role of users has aroused interest and is often linked with the role of grassroots employees as transmitters of user input in the innovating organization. Engen and Holen carry out an analysis of how the external and internal factors influence the service firms’ ability to innovate and how these factors are linked to the novelty of innovation. They use survey data from the Norwegian service sector to show that R&D is important when pursuing radical innovations, and employee-based activities, such as collaboration in ideation, mainly promote incremental innovations. Knowledge gained from customers is important for both radical and incremental innovations.

The third article, by Ville Eloranta from Aalto University in Finland and Juho-Ville Matveinen from Diagonal, a service design agency in Finland, proposes a new approach to the customer intelligence discussion. It focuses on the utilization of social platforms for improved value-in-use in service operations. The authors define social platforms as adaptable digital service environments that enable the co-creation of value and the collection of value-in-use information through interactions within a service system. Also, the approach takes into account interactions among distinct service systems. The article builds on the prevailing body of scientific knowledge on value-in-use and social platforms and suggests a number of propositions to be taken into consideration in service innovation, and, in further research on value creation through services.

In the fourth article, Nora Schütze from Cottbus University of Technology in Germany investigates the effects of electronic word-of-mouth communication on the reach of local service providers’ marketing activities. In the study, the penetration of electronic-word-of-mouth is simulated in an agent-based modelling of  electronic word-of-mouth processes. The article discusses the important question whether local service providers can compete in the social media on an equal footing with their larger rivals. Although the large competitors seem to have an advantage, the analysis shows some promising findings for local service providers who may benefit from pursuing  close connections by operating as locally as possible. Moreover, the study provides service marketers with  practical advice about how to benefit from their electronic word-of-mouth activities.

In the last article, Sen Bao and Marja Toivonen from VTT Technical Research Centre of Finland focus on knowledge-intensive business services (KIBS). KIBS companies provide knowledge inputs to clients, and to perform this function, they have to continuously develop their own knowledge base. Today, the inter-linkages between internationalization and innovation are an important topic, and KIBS have a central role as transmitters of knowledge between global and local levels. In their article, Bao and Toivonen analyze the ways in which Western KIBS enter Chinese markets and position their business in their respective value chains. The study highlights the importance of local partners and the consideration of different value dimensions in the Chinese context: customer value (the balance between benefits and sacrifices), provider value (paybacks and brand value), and relationship value (trust, commitment, and loyalty).

The second of two issues on Service and Innovation that put forward the pivotal role of services in today’s economic growth. The inspiration for these issues draws from the global interest in service innovation and the enabling technologies, processes, and knowledge resources across industries. Interaction of knowledge resources is a necessary driver of service innovation. Along with the developments of technology, the creation and management of knowledge have emerged as core themes of service innovation.

Technology as an enabling driver and knowledge as the focus of exchange are considered equally important resources in service innovation. However, the quality of interaction among participants in service systems will ultimately determine the success or failure of service innovation. Value creation through service innovation often takes place in multi-stakeholder settings, which call for resource integration through social interactions. Nevertheless, the processes, organizational structures, and contingency factors catalyzing value creation in multi-actor interaction in both intra- and inter-organizational settings have not been sufficiently explored.

The theoretical backgrounds of the articles are rooted in multiple disciplines, taking in technology studies, industrial marketing, management, and general innovation studies. The April issue introduced user-centric service in a variety of innovation contexts and investigated its social dimension. This issue continues to synthetize knowledge on service innovation by focusing on the interconnectedness of products and value creation activities, intellectual property, innovation practices, and the methods of interaction in collaboration in service systems.

In the first article, two authors from Sweden – Patrik Ström from University of Gothenburg and Mirko Ernkvist from the Ratio Institute – investigate the product and service offerings in the Chinese online gaming industry. Online gaming has become a compelling industry for investors and entrepreneurs, especially in Asia. The industry’s evolution in China demonstrates the complexity of the growth of this industry through various knowledge and production networks. Although Chinese companies have not been among the first movers in this industry, many of them have managed to move up the value chain within a few years, from operators of foreign-developed games to primary game developers. The authors argue that Chinese companies have managed to grow by utilizing the strategic control of services, player preferences, and responsiveness in their networks, translating the gained control into evolutionary improvements of their game offerings.

In the second article, two authors from Germany – Matthias Gotsch from the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe and Christiane Hipp from the Technical University Cottbus – present an empirical approach to measuring innovation outcomes through the analysis of trademarks in knowledge-intensive business services. With rooting in previous empirical investigations in other industries, the authors show that a trademark may be used as an innovation indicator. Based on the results from a survey of almost three hundred companies, the authors emphasize the role of trademarks in protecting intellectual property pertaining to knowledge-intensive services. Furthermore, they suggest that trademarks serve as adequate indicators to measure service innovation outcomes across knowledge-intensive business sectors.

The third article, by Heidi Korhonen from the VTT Technical Research Centre of Finland, discusses the transformation of industrial operation, from providing services as add-ons to industrial production toward providing services as solutions. She investigates the phenomenon from the perspective of the service-dominant logic, which emphasizes value co-creation in actor-to-actor networks. This study pays special attention to organizational structures and practices in industrial operation. The empirical case illustrates a development program of a Nordic manufacturer of arc welding equipment, showing how the manufacturer has become more customer and service oriented. Also, Korhonen discusses the implications of the service-dominant logic for innovation practices and argues that similar patterns can be expected to take place in many other industrial companies.

In the fourth article, Silvia Gliem, Janny Klabuhn, and Nadine Litwin from the Brandenburg University of Technology Cottbus-Senftenberg, Germany, analyze the interaction between technological development and service innovation in high-technology industries. Building on an extensive literature review, the authors show that the early studies of service innovation brought in the results of technological innovation to the realms of services. By analyzing a variety of theoretical approaches to technology-service interaction, the article deepens the understanding of innovation in the area of services. The authors analyze a number of case studies representing different service industries and differing technologies. Their findings reveal several factors in technology-service interaction, including the kind of technology involved in the innovation activities, the stage of development of the technology, and the type of service.

In the last article, Madeleine Gray, Mikaël Mangyoku, Artur Serra, Laia Sánchez, and Francesc Aragall discuss public service innovation in the European living lab context, with a focus on the Integrating Design for All in Living Labs (IDeALL) project. The authors argue that innovativeness may not be a sufficient catalyst in bringing new products to market, or in the development of public services that really meet people’s needs. They discuss the outcomes of a number of experiments related to designing services with users in real-life settings. These experiments shows how different collaboration methods can help innovators to develop solutions that genuinely meet user requirements. The article provides perspectives to using such methods and analyzes their use in the investigated cases. By doing so, the article helps businesses and public bodies to discover and test innovation approaches based on living labs.


For more contact http://timreview.ca/article/779

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European Association for Research on Services
Authors: Brigada