User-based Innovation in Services
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User-based Innovation in Services

Edited by Jon Sundbo and Marja Toivonen

This book demonstrates pioneering work on user-based service innovation using an analytical framework. This approach involves understanding the needs of users, the service firms collaborating with them, and recognising the fact that users are innovators and, as such, services develop while in use. As well as presenting case studies, the book discusses theoretically what user-based innovation means in the context of services. Three main fields are analysed: user-based innovation in knowledge-intensive business service, user-based innovation in public services, and models and methods for structuring user-based innovation.
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Chapter 7: Innovation Strategy in the Indian IT Service Industry: User Centred Issues on Innovation

Markus Holzweber, Jan Mattsson, Doren Chadee and Revti Raman

Extract

7. Innovation strategy in the Indian IT service industry: user centred issues on innovation Markus Holzweber, Jan Mattsson, Doren Chadee and Revti Raman 1 BACKGROUND: THE INDIAN RISE OF IT AS A SERVICE INDUSTRY AND THE GROWTH OF GLOBAL IT The rise of the IT service industry and especially the Internet is characterized by great exuberance and the belief in the seemingly unlimited potential of the Internet. Over the years the profitability and economic viability of companies and business models have changed tremendously. The fundamental driver of the Internet boom and the IT services industry is the belief that it would be possible to increase value creation, because the Internet would lower costs while increasing customer benefits at the same time. The IT services industry includes mass-produced software, custom programming, custom computer systems design, offshoring and the outsourcing of business processes. However, the primary reason for growth in these areas has been changes in business processes in the Western economy. Offshoring occurs when jobs and production are relocated to a foreign country. It can be contrasted with outsourcing, which occurs when a firm contracts with another firm to perform part of their work, but does not necessarily shift to a foreign country. The global market for services offshoring consists of two main sets of players: IT spenders (demand side) and IT service providers (supply side). On the demand side, the USA (37 per cent), Western Europe (35 per cent), and Japan (14 per cent) are the main IT spenders (EITO,...

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