Innovation in the Service Economy
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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.
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Chapter 5: Models of Innovation and Evolutionary Theory

Faïz Gallouj


INTRODUCTION In Chapter 2, we extended Saviotti and Metcalfe’s Lancasterian approach to the product to services, suggesting in particular that account should be taken of the service relationship (coproduction relationship). Drawing on this extended approach, we were able in Chapter 3 to identify a number of models of innovation (the radical, incremental, ad hoc, ameliorative, recombinative and formalization models), whose various mechanisms and modes of organization were investigated in Chapter 4. Our aim in this chapter is to examine how far the analyses and models of innovation presented in previous chapters can be said to belong to the evolutionary tradition and to what extent they might help to enrich or advance that tradition. This chapter begins by examining the evolutionary nature of our concept of the product and of the models of innovation derived from it (Section 1). Attempts to apply evolutionary concepts and methodologies to services are not in themselves anything new. The main points were discussed in Chapter 1 , in particular the attempt by Soete and Miozzo (1990) to construct a sectoral taxonomy of the forms of technical change adapted to services. The main weakness of the various analyses outlined in that chapter is that they focus almost exclusively on tangible process technologies. As we shall see here (Section 2), it is possible, by adopting an approach to services couched in terms of functions or characteristics, to construct sectoral taxonomies of innovation in services that are closer to reality. The analytical perspective then shifts as we attempt to...

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