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Johannes Glückler

This chapter aims to overcome the relative silence in the dialogue between technology-oriented innovation studies and service innovation research. Rather than viewing services as just an additional factor of innovation activities, it is argued that its inclusion requires a revised understanding of the concept of innovation itself. This chapter reviews the perspectives of assimilation, differentiation and integration in the interdisciplinary evolution of research on service innovation. It is argued that an integrative approach is best suited to capture the contemporary servitization in manufacturing and the increasing division of knowledge-based labor, leading to convergence between production and services both within and between firms. It is argued that this convergence yields opportunities for regional economies to leverage their innovativeness and competitiveness by both specializing in services and integrating services into the production system.

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Johannes Glückler and Harald Bathelt

This chapter explores the interrelations between institutions, defined as stabilized interaction patterns, and innovation, since successful innovation rests on the design of institutional contexts and since inconsistent institutional contexts constrain or even impede successful innovation. Such situations require processes of adjusting innovations to the institutional context (robust design), circumventing resistant institutional contexts (peripheral dominance), or creating new institutional contexts that fit the innovation process (institutional entrepreneurship). The chapter criticizes studies that focus on formal legislation and regulation as indicators of national institutional variety, while neglecting institutional practices and how these also differ at the sub-national level. From a relational perspective, supportive innovation policies need to respond to geographically and temporally varying institutional contexts even within a single legal and regulatory regime. It is argued that policy needs to understand the interrelationships between institutional practices and innovation, rather than viewing rules and regulations as determinants of innovation outcomes.