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 28: Service Innovation and Manufacturing Innovation: Bundling and Blending Services and Products in Hybrid Production Systems to Produce Hybrid Products

John R. Bryson


John R. Bryson 28.1 Introduction Since the 1960s there have been simultaneous quantitative and qualitative changes in the workings of the capitalist economy. Symptoms include alterations in the synergies that exist between manufacturing and service activities and in the ways in which manufactured goods are produced, sold and consumed. Service-type functions and service innovations have assumed a more critical role in processes of production as well as in the division of labour. There has been an increase in service-related occupations within the manufacturing sector and especially in the group of ‘other professionals’ that includes occupations such as business, finance and legal professionals (Pilat and Wölfl, 2005: 12). In some countries more than 50 per cent of manufacturing workers are engaged in service-related occupations (Pilat and Wölfl, 2005, 36). What has occurred and continues to occur is a shift in the relationship between service and manufacturing inputs in the production process. This is not a new shift, but it is one that has intensified since 1990. Part of this shift involves the creation of hybrid production systems and hybrid products that blend manufacturing and service processes and functions together to create value and to enhance competitiveness (Bryson, 2009). It is important to emphasise that this is an old rather than a new process, but it is a process that is becoming more important for the competitiveness of firms. On 27 April 1846 Benjamin Smith and his son Josiah were granted a lease by the Earl of Stanhope to extract...

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