Marja Toivonen

Emergence of innovations in services

Along with the ‘servicisation’ of society, innovation in services has become a topical issue. However, analytical and detailed discussion about the nature of service innovations and their emergence is only beginning. This article aims to contribute to this discussion through a theoretical analysis supplemented with findings from two empirical case studies. The theories examined are multi-disciplinary including general service theories, general innovation theories and theories linked to new service development and innovation management. The empirical studies have been carried out in Finland in the fields of real estate and construction services and of knowledge-intensive business services.

Innovation policy in services: The development of knowledge–intensive business services (KIBS) in Finland

Summary This paper starts from the observation that policy-oriented discussion and policy-oriented studies in the sector of knowledge-intensive business services (KIBS) have been rare despite the central role that this sector has been argued to play in innovation. Finland is one country where activities for the development of KIBS have recently been initiated both at the national and the regional level. This paper describes and analyses these activities. National and regional KIBS studies form an important starting point in all of them. In the practical conclusions, a common feature is the emphasis on the simultaneous development of both the demand and supply sides. The need to link KIBS to innovation systems has been identified particularly at the regional level.

Seeking efficiency through productisation: a case study of small KIBS participating in a productisation project

This paper discusses productisation in small knowledge-intensive business service companies (KIBS), whose typical problem is the inefficient production of services, starting from scratch for each client. The paper reviews literature on different approaches to developing services more ‘product-like’. It points out specific challenges linked to productisation of knowledge offerings and services that are co-produced with the customer. The case study examined a productisation project in which four KIBS productised one of their services with the help of a consultant. The results indicate that productisation contributes to the competitiveness and efficiency, and facilitates the development of customer understanding and business skills. An externally supported project is a good way to promote productisation in small KIBS where scarce resources often delay the adoption of this practice.

Future energy services: empowering local communities and citizens

Purpose – The purpose of this paper is to examine the future prospects of innovative services linked to sustainable energy systems. Design/methodology/approach – Service perspective is examined in the context of socio-technical transition and linked to the bottom-up and top-down social processes that foster sustainability. The foresight method applied is trend analysis. Findings – Two groups of trends were identified: the trends driven by technological development and the trends focussing on societal, managerial and consumer issues. The former consists of renewable energy sources, hybrid solutions, smart grids and smart energy markets. The latter involves distributed energy production, demand response, optimisation of sustainability and the role of energy as an opportunity and as service. The study reveals that energy is increasingly understood as a comprehensive and tailor-made service solution for communities and individual households. Consumers will enter the energy market as active participants; it ra...

Making bottom-up and top-down processes meet in public innovation

Innovations in an organisation derive from multiple sources. In the public sector, users and the policy sphere provide important but often unconnected impulses for innovation. These impulses are transmitted to the organisation by grassroots employees who interact with users and managers who implement policy requirements. The paper examines the actors and activities that coordinate bottom-up and top-down initiatives and promote their development into innovations. It creates a theoretical framework that combines the views of employee-driven innovation and strategic reflexivity and supplements them with an analysis of coordination in innovation processes. The functioning of this framework is illustrated in the context of childrens day care services. The results highlight the central role of middle managers and provide new knowledge regarding their ‘bridging’ activities in innovation. The adjustment of bottom-up and top-down processes requires the personal involvement of managers, and the creation of communication arenas, networks and mediating tools.

Employees and users as resource integrators in service innovation: a learning framework

In order to exploit the emerging opportunities in the marketplace or in society, service organizations are increasingly interested in new innovation models and effective innovative practices. The involvement of users and stakeholders is an essential aspect in these models. This is also the basis of the service-dominant (S-D) logic. This framework replaces the traditional producer-centric view with an actor-to-actor perspective and considers the integration of resources an essential activity in the co-creation of value. Even though S-D logic has apparent implications for theorizing about service innovation, managerially-oriented research in this area is at an early stage. Product- and producer-centric practices and in-house R&D are still the focus of innovation studies, and they also dominate innovation efforts in organizations. The particular interest of this chapter concerns the integration of user-based and employee-driven perspectives in innovation. The two perspectives have until now developed separately, the latter having very few linkages to the S-D logic discussion. However, grassroots-level employees are in a key position as receivers of user insights and as collaborators with users. We suggest a new integrated approach by analyzing the user–employee interaction in innovation both theoretically and in two empirical cases.

Integration of planning and execution in service innovation

The purpose of this article is to elaborate two activities included in innovation: planning and execution. We use four dimensions – decision making, organization, process, and external interaction – as the analytical framework. Building on five empirical case studies in the Finnish residential sector, the article identifies various approaches to integrating planning and execution during the development process. Furthermore, the article identifies four integrative mechanisms that relate to each of the four analytical dimensions. The key proposition is that the integration between planning and execution is the driving force for innovation, and that the locus of this integration is the practical engagement of actors with specific aims, problems, and means at hand related to the emerging solution. Finally, the article identifies the availability of, or access to, service-provision resources and the customer interface as a key enabler of this integration.

Cultural differences in servitization: Nordic manufacturers in China

Purpose – The purpose of this study is to examine the challenge of cultural differences in servitizing manufacturing. The focus is on services that the representatives of small, developed and open economies (exemplified by Nordic countries) provide in a large, developing and centralized economy (exemplified by China). Along with internationalization, cultural differences in business practices have become a topical issue. They may be particularly challenging when the business area is new and the cultures of business parties include opposing characteristics. Design/methodology/approach – A multiple case study approach is applied, including five case companies from Finland and Sweden. They are all manufacturing companies in metals and mechanical engineering industries, offering product services, process optimization and consultancy services. Empirical data have been collected from both Nordic service providers and their customers in China. Findings – The data reveal that services including tangible elements ...

Modeling the Dynamics of Service: The Creation of Customer Value

During recent years, value-based approaches have gained popularity in both research and managerial practice. One of the most influential approaches is service-dominant logic (SDL) that focuses on the co-creation of value between the provider and customer and highlights the context in which value is created and the related resources integrated. Starting from these viewpoints, this chapter provides a framework for a systematic analysis of the value- and service-based business. We apply the system dynamic modeling to study the customer value creation. In particular, we describe the dynamic relationship between value promise given to customer and the customer-experienced value.

A system dynamic and multi-criteria evaluation of innovations in environmental services

The purpose of this paper is to study the challenge of evaluation in the context of systemic innovations in which services are a core element. The paper argues that the traditional evaluation methods and measures are not able to capture neither the diversity of innovations in services and systems nor the multifaceted dimensions of performance resulting from these innovations. In order to contribute to a more purposeful evaluation practices and methods, a new combinatory approach is suggested based on multi-criteria and system dynamic perspectives. This approach is illustrated in the context of environmental services, using an environmental data platform as a case example.