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 6: Characteristics, Worlds of Production and Worlds of Innovation

Faïz Gallouj

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


6 Characteristics, Worlds of Production and Worlds of Innovation INTRODUCTION It is possible, and it is the aim of this chapter, to advance the approach to the product developed in Chapter 2, and the models of innovation rooted in evolutionary theory derived from it (cf. Chapters 3 and 3, interpreting it within by the framework of the economics of conventions. In so doing, we are seeking to link two bodies of theoretical writings: evolutionary theory and convention theory. This chapter, it must be emphasized, occupies a particular position in the book. Naturally, we cannot claim that it constitutes an exhaustive examination of such a difficult question. Our objective is the much more modest one of putting forward a certain number of hypotheses and lines of thought that might in future warrant further investigation and greater empirical and theoretical validation. Our attempt to reconcile the evolutionary approach to innovation and convention theory - an exercise which, as we will see, particularly enriches our understanding of the nature of the ‘product’ and of the mechanisms of innovation in services - will be a three-stage process. We will begin by providing a broad-brush outline of some of the general principles of convention theory, at least in the variants of it dedicated to highlighting the plurality of worlds (or states of worlds) in which human activities can be performed and justi@ed (Section 2.1). Without concerning ourselves at this stage with the question of innovation, we will then go on (Section 2.2) to examine...

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