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AbstractPurpose -The purpose of this paper is to identify and reflect on a set of dynamic capabilities for managing service innovation and applies a dynamic capabilities view (DCV) of firms for managing service innovation. Design/methodology/approach -This theoretical paper offers a conceptual framework for managing service innovation by proposing six dynamic service innovation capabilities. This framework builds on and is integrated with a model of service innovation that covers the possible dimensions where service innovation can take place. On this basis, avenues for future research into managing service innovation are identified and managerial implications discussed. Findings -The six dynamic service innovation capabilities identified are: signalling user needs and technological options; conceptualising; (un-)bundling; co-producing and orchestrating; scaling and stretching; and learning and adapting. It is hypothesized that successful service innovators, which may include manufacturing firms developing into providers of service solutions, outperform their competitors in at least some of these capabilities.Research limitations/implications -The six dynamic service innovation capabilities identified in this theoretical paper, their mutual links as well as links with dimensions of service innovation need to be tested further. Further refinement is required in order to be able to discriminate between various industries, sizes and types of firms. Practical implications -Those involved in managing service innovation are offered a framework for systematically assessing dynamic service innovation capabilities. Originality/value -The main contribution of this paper is that it links a service (innovation) perspective to a DCV of the firm by proposing a set of six dynamic service innovation capabilities.
In the unfolding knowledge-based economy, services do matter. But while they are increasingly seen to play a pivotal role in innovation processes, there has been little systematic analysis of this role. This essay presents a four-dimensional model of (services) innovation, that points to the significance of such non-technological factors in innovation as new service concepts, client interfaces and service delivery system. The various roles of service firms in innovation processes are mapped out by identifying five basic service innovation patterns. This framework is used to make an analysis of the role played by knowledge-intensive business services (KIBS) in innovation. KIBS are seen to function as facilitator, carrier or source of innovation, and through their almost symbiotic relationship with client firms, some KIBS function as co-producers of innovation. It is further argued that, in addition to discrete and tangible forms of knowledge exchange, process-oriented and intangible forms of knowledge flows are crucial in such relationships. KIBS are hypothesised to be gradually developing into a "second knowledge infrastructure" in addition to the formal (public) "first knowledge infrastructure", though there is likelihood of cross-national variations in the spill-over effects from services innovation in and through KIBS, and in the degree to which KIBS are integrated with other economic activities. Finally, some implications for innovation management and innovation policy are discussed.
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