The Handbook of Innovation and Services
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The Handbook of Innovation and Services

A Multi-disciplinary Perspective

Edited by Faïz Gallouj and Faridah Djellal

This Handbook brings together 49 international specialists to address an issue of increasing importance for the world’s post-industrial economies; innovation as it relates to services.
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Chapter 19: Services Innovation in a Globalized Economy

Peter Daniels


Peter Daniels 19.1 Introduction Only very recently has work on services innovation moved beyond ‘Cinderella status . . . being neglected and marginal’ (Miles, 2000, 371; Tether, 2003). Research has tended to focus on conceptualization of service innovation together with case studies of selected service activities (see for example Boden and Miles, 2000; Gallouj, 2002; Gallouj and Weinstein, 1997; Metcalfe and Miles, 2000). The need to understand services innovation better has increased as services have become increasingly globalized with the emergence of new economies, notably India and, to a lesser extent, China. It seems that: the challenge to business is to find ways to gain productivity and economy of scale in services, while still maintaining a differentiation among competing services that creates loyal customers and economic profits. We can begin this process by gaining a better understanding of how services . . . innovation can be embedded in information technology and systems in order for the innovator to be able to capture the economic rewards of their innovative efforts and investments. (Goldhar et al., 2007, 10) A services sector that is productive and innovative is the key to overall national economic performance as well as the welfare of citizens (OECD, 2005a, 2005b). The capacity of national economies to adjust to economic globalization in services and their growing share of employment and growth will rely heavily on innovation. This applies both to service producers and to the policies that will be required to facilitate and deepen innovation capacity. While India and to a lesser extent China have...

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