Innovation in the Service Economy

Innovation in the Service Economy

The New Wealth of Nations

Faïz Gallouj

In this book Faïz Gallouj propounds a theoretical framework which describes and evaluates the main approaches to analysing and understanding innovation in services. He provides interesting and extensive empirical material on the nature and sources of innovation in various services sectors and countries, and makes an original contribution both to theories of innovation in services and theories of innovation in general. Taking both an evolutionary and conventionalist stance, he demonstrates that services, and more importantly innovations in services, can be regarded as the new wealth of nations.

Chapter 1: Innovation in Services: A Brief Survey

Faïz Gallouj

Subjects: economics and finance, economics of innovation, services, innovation and technology, economics of innovation


INTRODUCTION No serious theoretical investigation of innovation in services can dispense with a survey, however brief and scholarly, of the ‘state of the art’. Although such an exercise is undeniably useful (innovation in services being indeed a new ‘art’, if not in the workplace at least as far as researchers and governments are concerned), we will confine ourselves here to the bare minimum and refer thereader to other, more extensive surveys (see in particular Gallouj, 1994a; C. Gallouj and F. Gallouj, 1996; Sundbo, 1998; Boden and Miles, 2000; Flipo, 2000; Dumont, 2001; Warrant, 2001). A not insignificant share of the literature on innovation in services can be accounted for by identifying three basic approaches to research: 1. a technologist approach that equates or reduces innovation in services to the introduction of technical systems (material transport and processing systems and, above all, information and communication systems) into service firms and organizations; 2. a service-oriented approach that seeks to identify any possible particularities in the nature and organization of innovation in services; 3 . an integrative approach which, taking as its starting point the trend towards convergence and the blurring of the boundaries between goods and services, favors a similar analytical approach to innovation in both cases. These three approaches fit neatly into what might be described as a natural life cycle of theoretical concerns.’ The technologist approach is in a phase of relative decline (the pioneers of research into innovation in services naturally adopted a technologist ‘gaze’ that had its roots in...

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