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The public administration literature and adjacent fields have devoted increasing attention to living labs as environments and structures enabling the co-creation of public sector innovation. However, living labs remain a somewhat elusive concept and phenomenon, and there is a lack of understanding of its versatile nature. To gain a deeper understanding of the multiple dimensions of living labs, this article provides a review assessing how the environments, methods and outcomes of living labs are addressed in the extant research literature. The findings are drawn together in a model synthesizing how living labs link to public sector innovation, followed by an outline of knowledge gaps and future research avenues.

Purpose The aim of this paper is to give an empirical illustration of value co-creation and to argue for narrative methodology as a fruitful analytical strategy when exploring the processes of value co-creation. Design/methodology/approach Through an in-depth case study in the non-profit housing sector in Denmark, the research explored how residents perceive and co-create value in a long-term service relationship. The point of departure is an understanding of value co-creation as a phenomenological construct determined by the beneficiary, and the research is based primarily on the perspectives of service-dominant logic and customer-dominant logic. Findings The research elucidated how value is both socially created and deconstructed through stories. Moreover, narrative analysis revealed how residents’ perceptions of services are deeply embedded in context and time. In this way, the study highlighted that the co-creation of value is inherently social and temporal. Practical implications Understanding how value is perceived and negotiated by customers might assist practitioners to refine their understanding of value co-creation and lead them to address customers in more nuanced ways. Originality/value Prevailing streams in service research on value co-creation argue for more studies and empirically grounded examples of value co-creation processes, especially those based in the customer sphere. This paper contributes to such an enhanced understanding of the process of value co-creation and gives the outline of a new methodology for studies in this specific area of service research.

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