Edited by Roland T. Rust and Ming-Hui Huang
Chapter 16: New service development from the perspective of value co-creation in a service system
New service development (NSD) is the engine of renewal to create a profitable business. Companies try to increase their competitiveness through innovative activities and interactions that create value for the involved actors, such as existing customers, potential new customers and other shareholders (for example, Edvardsson et al. 2000; Gustafsson and Johnson 2003). New service development often stems from an improved way to use existing resources to co-create value. New resources or new technologies are also sometimes used and integrated within systems that are capable of creating value. These value-creating systems or service systems constitute the basic context and enabler of value co-creation and thus the foundation for NSD. A service system is an appropriate frame for studying new service development, because it moves away from traditional perspectives "rooted in technological product inventions" (Michel et al. 2008, p. 54). Value is always co-created with the customer through the activation of sets of resources (Vargo and Lusch 2004). Service companies accordingly need to design resource integration mechanisms within the service system that support customers and other value co-creation actors to enhance NSD and innovation. Customers also co-develop value as one mode of co-creation in which they and other actors can be actively involved in fostering NSD. Customers interact and develop relationships within the system in order to exploit and enhance their own resources and to gain the benefit of those of others.
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