Chapter 27. Service Innovation

John E. Ettlie, Iliana Payano Mejia, and Jessica M. Walker

Rochester Institute of Technology

It is a sublime irony that the economic dominance of the service sector in developed economies has generated little or no applied research on service innovation. Many even consider the distinction between a service and a service innovation at best uninteresting and at worst an annoying waste of time. In response, the intention here is to be at least provocative and at best provide a documentation of the headwaters of a rich and fruitful new research stream in the field of innovation management and operations.

Numerous typologies of services have been published (see Berry et al., 2006) but they all fall short of being very useful to service innovators and their systematic observers. Most likely, this is a consequence of the fact that the service sector spends little of its retained earnings on R&D. Not surprisingly, much of the academic research on services appears in the marketing and operations literature—how to package, position, sell, and deliver a service offering. While this literature provides a solid context for the current research, it does not give us much information on the whys and wherefores of the service innovation phenomena. In this report, it is argued that service innovation is different—different from just a clear understanding of R&D, manufactured new products, and services offered through any channel. Up until now, service innovators went on ...

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