Handbook of Regional Innovation and Growth
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Handbook of Regional Innovation and Growth

Edited by Philip Cooke, Bjørn Asheim, Ron Boschma, Ron Martin, Dafna Schwartz and Franz Tödtling

Today, economic growth is widely understood to be conditioned by productivity increases which are, in turn, profoundly affected by innovation. This volume explores these key relationships between innovation and growth, bringing together experts from both fields to compile a unique Handbook.
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Chapter 27: Service Innovation

Yuko Aoyama and Rory Horner


Yuko Aoyama and Rory Horner INTRODUCTION Today, industry executives view service innovation as the next new wave of potential growth (BusinessWeek, 2007). Corporate giants such as IBM and GE recognized that their highest growth in revenue was coming from their service activities, and established sections and personnel dedicated to exploring how service innovation can revolutionize the way we view corporate organization. In academic literature, however, innovations in services have long been a neglected aspect of research on innovation. New knowledge that leads to product innovation is assumed to reside largely in the manufacturing sector. The conceptualization of services has long been found to be highly problematic (Castells, 1980; Stanback, 1980; Gershuny, 1978; Daniels, 1993; Sayer and Walker, 1992), and whether it has a distinct contribution to a regional economy has been debated in the literature. Service innovation is a combination of two highly contested concepts, and the term is used and interpreted in multiple ways by firms and scholars. While no one disputes the importance of services in our economy,1 research on service innovation is at its early development phase (Drejer, 2004; Bryson and Monnoyer, 2004). In this chapter we explore various aspects of service innovation, firstly as a conceptual problem, and secondly, its multiple usage and application. We also discuss the potential contributions and implications of service innovation to regional development. UNPACKING SERVICE INNOVATION Service innovation is mired in ‘conceptual confusion’ (Chesbrough and Spohrer, 2006, 36). While there is a consensus over service innovation’s potential in adding new...

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