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Service innovation

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One of the key aspects of many service activities is the high involvement of the client/customer/user in the production of the final service. Additionally, firms cooperate with both horizontal (e.g., competitors) and vertical (e.g., suppliers) business partners in order to develop relevant service innovations. Without this co-production (i.e. interactivity of service production), the service would often not be created. This co-production, together with the intangibility of many service products, causes service innovation to often take forms rather different from those familiar through studies of innovation in manufacturing. Innovation researchers have, for this reason, stressed that much service innovation is hard to capture in traditional categories like product or process innovation, and that its effects are diverse. The co-production process, and the interactions between service provider and client, can also form the focus of innovation. A growing number of professional association have service sections that promote service innovation research, including
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that can be identified and systematically reproduced in other cases or environments. The replicable element can be the service outcome or the service process as such or a part of them. A service innovation benefits both the service producer and customers and it improves its developer's competitive edge. A service innovation is a service product or service process that is based on some technology or systematic method. In services however, the innovation does not necessarily relate to the novelty of the technology itself but the innovation often lies in the non-technological areas. Service innovations can for instance be new solutions in the customer interface, new distribution methods, novel application of technology in the service process, new forms of operation with the supply chain or new ways to organize and manage services."
392:(PSS) business model, industries develop product with value-added service instead of single product itself, and provide their customers services that are needed. In this relationship, the market goal of manufacturers is not one-time product selling, but continuous profit from customers by total service solution, which can satisfy unmet customers’ needs. Most of PSS systems focus on ‘human-generated or human-related data’ instead of ‘machine-generated data or industrial data’, which may include machine controllers, sensors, manufacturing systems, etc. Early work using web-based product monitoring for remote product services including GM OnStar Telematics, Otis Remote Elevator Maintenance (REM), and GE Medical InSite during the 1990s. 413:
group, "Fostering Innovation in Services" as well as various TrendChart studies. The European Commission has also launched a number of Knowledge Intensive Services Platforms designed to act as laboratories for new public policies for services innovation. Few economic development agencies at the member state level, and fewer still at the regional level, have translated this new thinking on services innovation into policy action. Finland is an exception, where
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apparent – developments such as supermarkets and other self-service facilities are significant in the development of modern service industries. Such organizational innovations will often have a technological dimension, whether this be very basic (e.g. shopping trolleys), or relatively high-tech (EPOS – electronic point of sale – equipment or ATMs linked into networks).
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new to the firm and do change the service/good offered on the market and do require structurally new technological, human or organizational capabilities of the service organization." This definition covers the notions of technological and non-technological innovation. Non-technological innovations in services mainly arise from investment in intangible inputs.
245:. He listed a series of characteristic features of services, and associated these with particular types of innovation. Such innovations are often aimed at overcoming problems associated with service characteristics like the difficulty in demonstrating the service to the client, or the problems in storing and building up stocks of the service. 165:
solutions to problems (be these new or familiar ones). Examples might include new types of bank account or information service. In some service sectors, such as retail, there is much talk about “formats”, such as the organization of shops in different ways (more or less specialized, more or less focused on quality or cost-saving, etc.).
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Another definition proposed by Van Ark et al. (2003) states it as a "new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more (re)new(ed) service functions that are
454:– its national policy and advisory board for enterprise, trade, science, technology and innovation – having undertaken a review of Ireland's existing policy and support measures for innovation, and outlined options for a new policy and framework environment in support of service innovation activity. 320:
Organization of Consumption (Often hard to separate production from consumption; Self-service in formal and informal economies commonplace.>>> Increased use of self-service, utilizing existing consumer (or intermediate producer) technology – e.g. telephones, PCs – and user-friendly software
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Organization of Industry (Some services state-run public services; Others often small-scale with high preponderance of family firms and self-employed >>> Externalization and privatization of public services; combination of small firms using network technologies; IT-based service management
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The service innovation literature is surprisingly poorly related to the literature on new product development, which has spawned a line of study on new service development. This often focuses on the managerially important issue of what makes for successful service innovation. See for example Johne
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Beyond self-servicing, the involvement of clients as coproducers is particularly important for knowledge-intensive business services, with the emphasis being laid upon clients' role in advancing the expertise of service suppliers, and identifying new avenues for its application. Web2.0 has brought
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Nature of Product (Immaterial, often information-intensive; Hard to store or transport; Process and product hard to distinguish. >>> Add material components (e.g. client cards, membership cards). Use telematics for ordering, reservation, and if possible – delivery. Maintain elements of
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Organization of Labor Process (Workforce often engaged in craft-like production with limited management control of details of work. >>> Use IT to monitor workforce (e.g. tachometers and mobile communications for transport staff; Aim for 'flatter' organizational structures, with data from
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Many literatures on what makes for successful innovations of this kind comes from the New Service Development research field (e.g. Johne and Storey, 1998; Nijssen et al., 2006). Service design practitioners have also extensively discussed the features of effective service products and experiences.
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In recent years policy makers have begun to consider the potential for promoting services innovation as part of their economic development strategies. Such consideration has, in part, been driven by the growing contribution that services activities make to national and regional economies. It also
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After Miles (1993), numerous studies were made, one of the more recent studies that reaches similar conclusions was from a qualitative survey of service organizations by Candi (2007).) Note that the “product” related innovations below have a lot in common with new service development as discussed
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defines service innovation as "a new or significantly improved service concept that is taken into practice. It can be for example a new customer interaction channel, a distribution system or a technological concept or a combination of them. A service innovation always includes replicable elements
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has been particularly active in seeking to generate reflection on services innovation and its policy implications. This has resulted in studies such as the OECD's reports into knowledge intensive services, and the European Commission Expert Group report on services innovation – the report of the
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Organizational change is innovation. Survey data suggest that services place particular emphasis on organizational change. Many innovations in services involve combinations of specific new technologies together with organization change. The role of organizational innovations in services is very
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At the regional level, limited information is available on how Europe's regions are responding to the challenges presented by service innovation. has recently published a European survey on services innovation and regional policy responses. The results of this suggest that very few regions in
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The industrialization of services, involving efforts to standardize services, to yield service products of predictable characteristics and quality, with economies of scale and improved delivery times. This typically involves the introduction of high levels of division of labor, with the use of
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resemble most familiar process innovation in manufacturing sectors. New information technology is especially important to services, since it allows for greater efficiency and effectiveness in the information-processing elements that are, as we have seen, prevalent to a great extent in services
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refers to innovation in the interface between the service provider and its customers. Clients are often highly involved in service production, and changes in the way in which they play their roles and are related to suppliers can be major innovations for many services. Examples might include a
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also often relates to the linkage between the service provider and its client, since delivery does involve an interaction across this interface. However, there are also internal organizational arrangements that relate to the ways in which service workers perform their job so as to deliver the
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refers to a service concept that is new to its particular market – a new service in effect, or in Edvardsson's (1996, 1997) terminology, a “new value proposition”. Many service innovations involve fairly intangible characteristics of the service, and others involve new ways of organizing
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Labor (Some services highly professional, esp. requiring interpersonal skills); others relatively unskilled, often involving casual or part-time labor. Specialist knowledge may be important, but rarely technological skills (other than Information Technology) >>> Reduce reliance on
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critical services. Much innovation concerns the electronic delivery of services, but we can also think of, for instance, transport and packaging innovations (e.g. pizza delivery). An emerging concept of SDP is the idea of taking a "factory" approach to Service Innovation. A
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As well as Technology and Production process, four dimensions were specified whose linkages are very strong in creative sectors like videogames, advertising and design: Cultural Product, Cultural Concept, Delivery and User Interface.
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initiative, designed to support ‘Finnish companies and research organizations in the development of innovative service concepts that can be reproduced or replicated and where some technology or systematic method is applied.’
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greater amount of self-service for clients visiting service organizations. There is a French literature on service innovation that focuses especially on this type of innovation, identifying it as innovation in “servuction”.
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Delivery of Product (Production and consumption coterminous in time and space; often client or supplier has to move to meet the other party.>>> Telematics; Automated Teller Machines and equivalent information
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pre-packaged and automated elements (such as pre-prepared meals, word processed templates for form letters, and the like). Standardization of the service products has become a competitive strategy for many firms.
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Regulation (Professional regulation common in some services.>>> Use of databases by regulatory institutions and service providers to supply and examine performance indicators and diagnostic evidence.)
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reflects the emerging recognition that traditional policy measures such as R&D grants and technology transfer supports have been developed from a manufacturing perspective of the innovation process.
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sectors. We also often see physical products accompanying services, such as customer loyalty cards and “smart” RFID cards for transactions, and a wide range of devices for communication services.
110:, organizations, and industries – organizational innovations, as well as service product and process innovations, and the management of innovation processes, within service organizations. 262:
expensive and scarce skills by use of expert systems and related innovations; Relocation of key operations to areas of low labor costs (using telecommunications to maintain coordination).
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Organization of Markets (Some services delivered via public sector bureaucratic provision; some costs are invisibly bundled with goods (e.g. retail sector).>>> Introduction of
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are limited >>> Standardize production (e.g. 'fast-food' chains), reorganize in more assembly-line-like feature with more standard components and higher division of labor.)
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Technology and Plant (Low levels of capital equipment; heavy investment in buildings >>> Reduce costs of buildings by use of teleservices, toll-free phone numbers, etc.)
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Please remove or replace such wording and instead of making proclamations about a subject's importance, use facts and attribution to demonstrate that importance.
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France, the UK and Ireland have an explicit focus on services and innovation. Many do, however, express a desire to address this issue in the coming future.
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A new IT system (technology dimension) may be used to enable customer self-service (interface dimension) as in the case of a bank contacting its customers.
238:(MIoIR), The University of Manchester, is one of the scholars on the study of 'Service Innovation'. He coined the term in his 1993 article in the journal 218:
An elaboration of this model to suggest six dimensions of innovation was developed in the course of work on creative sectors, by Green, Miles and Rutter.
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Thus den Hertog (2000) who identifies four “dimensions” of service innovation, takes quite a different direction to much standard innovation theorizing.
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In practice, the majority of service innovations will almost certainly involve various combinations of these four dimensions. For instance:
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Nijssen, E.J.; Hillebrand, B.; Vermeulen, P.; Kemp, R. (2006), "Exploring Product and Service Innovation Similarities and Differences",
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A new service allowing a client to examine various options and calculate what they would be paying with different types of accounts.
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or Internet for remote input of client details; use software to record client requirements and match to service product.
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above. In the following list, features of services are linked to innovation strategies by the symbol >>>.
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Additionally, a number of general tendencies in the innovation process in services have been noted. These include:
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Aas, Tor Helge; Pedersen, Per Egil (2010). "The firm-level effects of service innovation: a literature review".
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Services may be delivered electronically, as in the case of much online banking and cash withdrawals from ATMs.
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Marketing (Difficult to demonstrate products in advance.>>> Guarantees; demonstration packages (e.g.
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The ability to track one's order or the location of an item that one has posted or is expecting to receive.
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society), new reservation systems; more volatility in pricing using features of EPOS and related systems.)
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Generation of Service Innovation through Customer Integration in the Music Industry (Full text download)
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Finland has been active in thinking about the policy implications of services innovation. This has seen
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field and front-office workers directly entering databases and thence Management Information Systems.)
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Edvardsson, B. (1997), "Quality in new service development: Key concepts and a frame of reference",
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Services Features and Innovation Potential: Miles (1993) influential article on 'Service Innovation'
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A new service will often require a new service delivery system, and changes at the client interface.
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environment for more effective service innovation, development and operations for the IP era.
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Candi, M (2007), "The role of design in the development of technology-based services",
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Features of Product (Often customized to consumer requirements.>>> Use of
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New service development: a review of the literature and annotated bibliography
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and Storey (1998), who reviewed numerous New Service Development studies.
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Miles, I. (July–August 1993), "Services in the New Industrial Economy",
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Ireland has been considering a services-focused innovation policy, with
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Services Innovation in Ireland – Options for Innovation Policy
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Knowledge-intensive business services as co-producers of innovation
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is used to refer to many things. These include but not limited to:
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Tekes - Serve - Innovative Services Technology Programme 2006-2010
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An important trajectory of organizational change has been towards
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Features of Production (Production is often non-continuous and
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Services Innovation: A Reconfiguration of Innovation Studies
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Tekes: Finnish Funding Agency for Technology and Innovation
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International Society for Service Innovation Professionals
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and/or privatization of services; new modes of charging (
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Features of services associated with services consumption
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Features of services associated with service production
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has also undertaken initiatives for services R&D.
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Innovation and Knowledge-intensive Service Activities
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Features of services associated with services markets
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Features of services associated with service product
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Service Innovation using IoT and Big Data Analytics
708:a book chapter in Fagerberg et al. (Eds.) (2004), 417:have been a focus of much regional work (esp. the 697:See for more recent thinking, Miles I. (2001) 593:International Journal of Research in Marketing 477:International Journal of Innovation Management 658:International Journal of Production Economics 8: 349:software, shareware, trial periods of use).) 236:Manchester Institute of Innovation Research 32:promotes the subject in a subjective manner 723:June, 2003, Research Series No6, The Hague 740: 612: 54:Learn how and when to remove this message 810:A global research on Service Innovation. 645:Key concepts for New Service Development 315:menus and new modes of delivering orders 153:Areas of innovation – den Hertog's model 467: 242:, (Vol. 25, No. 6, pp. 653–672,) 415:knowledge intensive business services 379:” to the fore in electronic services. 7: 396:Service innovation and public policy 643:Edvardsson, B.; Olsson, J. (1996), 29:This article contains wording that 34:without imparting real information 14: 229: 20: 555:Business Week, March 29th, 2007 309:Role of Consumer (Services are 874:Services sector of the economy 605:10.1016/j.ijresmar.2006.02.001 92:and "new service development". 1: 710:Oxford Handbook of Innovation 670:10.1016/S0925-5273(97)80765-7 751:10.1016/j.destud.2007.04.004 694:10.1016/0016-3287(93)90106-4 288:familiar 'user-interfaces'.) 625:den Hertog, P. (Dec 2000), 293:Electronic data interchange 176:The Service Delivery System 136:Service Innovation Research 895: 181:"service factory" approach 489:10.1142/S1363919610002878 86:technological innovation 794:Survey is available on 719:B.van Ark et al.,(2003) 445:have programs as well. 390:product-service system 183:is a standardized and 529:Pro-innovation Europe 191:Technological Options 152: 849:Innovation economics 169:The Client Interface 859:Product development 704:; Miles Ian (2004) 406:European Commission 388:In the traditional 162:The Service Concept 879:Services marketing 706:Service Innovation 534:2009-09-24 at the 516:2007-10-21 at the 311:consumer-intensive 271:economies of scale 67:Service innovation 854:Political economy 808:USE Global Report 511:Europe Innovation 234:Ian Miles of the 101:paraprofessionals 97:service processes 64: 63: 56: 886: 869:Systems thinking 864:Public economics 839:Entrepreneurship 793: 787: 782:, archived from 774: 768: 759: 753: 744: 718: 696: 678: 672: 654: 648: 641: 635: 633: 623: 617: 616: 589: 580: 571: 562: 553: 538: 526: 520: 508: 502: 499: 493: 492: 472: 123:research agency 82:service products 59: 52: 48: 45: 39: 24: 23: 16: 894: 893: 889: 888: 887: 885: 884: 883: 824: 823: 804: 790: 776:Forfás (2006), 775: 771: 760: 756: 742:10.1.1.127.9028 726: 715: 679: 675: 655: 651: 642: 638: 631: 624: 620: 590: 586: 577: 568: 559: 550: 547: 542: 541: 536:Wayback Machine 527: 523: 518:Wayback Machine 509: 505: 500: 496: 474: 473: 469: 464: 398: 386: 377:user innovation 232: 155: 138: 117: 60: 49: 43: 40: 37: 25: 21: 12: 11: 5: 892: 890: 882: 881: 876: 871: 866: 861: 856: 851: 846: 841: 836: 826: 825: 822: 821: 816: 811: 803: 802:External links 800: 799: 798: 796:cm-intl.com/en 788: 786:on 2007-11-17. 769: 754: 735:(6): 559–583, 729:Design Studies 724: 713: 688:(6): 653–672, 673: 649: 636: 618: 599:(3): 241–251, 584: 575: 566: 557: 546: 543: 540: 539: 521: 503: 494: 483:(5): 759–794. 466: 465: 463: 460: 397: 394: 385: 382: 381: 380: 372: 369:self-servicing 365: 361: 353: 352: 351: 350: 343: 340: 324: 323: 322: 318: 307: 298: 297: 296: 289: 280: 279: 278: 274: 267: 263: 259: 231: 228: 216: 215: 212: 209: 206: 203: 196: 195: 188: 185:industrialized 173: 166: 154: 151: 149:, and others. 137: 134: 116: 113: 112: 111: 106:Innovation in 104: 95:Innovation in 93: 90:service design 62: 61: 28: 26: 19: 13: 10: 9: 6: 4: 3: 2: 891: 880: 877: 875: 872: 870: 867: 865: 862: 860: 857: 855: 852: 850: 847: 845: 842: 840: 837: 835: 832: 831: 829: 820: 817: 815: 812: 809: 806: 805: 801: 797: 792: 789: 785: 781: 780: 773: 770: 766: 765: 761:OECD (2006), 758: 755: 752: 748: 743: 738: 734: 730: 725: 722: 717: 714: 711: 707: 703: 700: 695: 691: 687: 683: 677: 674: 671: 667: 663: 659: 653: 650: 646: 640: 637: 630: 629: 622: 619: 615: 610: 606: 602: 598: 594: 588: 585: 583: 579: 576: 574: 570: 567: 565: 561: 558: 556: 552: 549: 548: 544: 537: 533: 530: 525: 522: 519: 515: 512: 507: 504: 498: 495: 490: 486: 482: 478: 471: 468: 461: 459: 455: 453: 452: 446: 444: 440: 436: 431: 427: 422: 420: 416: 411: 407: 402: 395: 393: 391: 383: 378: 373: 370: 366: 362: 358: 357: 356: 348: 344: 341: 338: 334: 333:quasi-markets 330: 329: 328: 325: 319: 316: 312: 308: 304: 303: 302: 299: 294: 290: 286: 285: 284: 281: 275: 272: 268: 264: 260: 257: 256: 255: 252: 251: 250: 246: 244: 241: 237: 227: 223: 220: 213: 210: 207: 204: 201: 200: 199: 192: 189: 186: 182: 177: 174: 170: 167: 163: 160: 159: 158: 150: 148: 144: 135: 133: 129: 126: 122: 114: 109: 108:service firms 105: 102: 98: 94: 91: 87: 83: 79: 75: 72: 71: 70: 68: 58: 55: 47: 35: 33: 27: 18: 17: 791: 784:the original 778: 772: 763: 757: 732: 728: 716: 709: 705: 698: 685: 681: 676: 664:(2): 31–46, 661: 657: 652: 644: 639: 627: 621: 596: 592: 587: 578: 569: 560: 551: 524: 506: 501:Candi (2007) 497: 480: 476: 470: 456: 449: 447: 429: 425: 423: 403: 399: 387: 376: 354: 346: 336: 332: 326: 321:interfaces.) 314: 310: 300: 282: 253: 247: 239: 233: 224: 217: 197: 190: 175: 168: 161: 156: 139: 130: 118: 107: 96: 81: 66: 65: 50: 41: 30: 115:Definitions 844:Innovation 828:Categories 614:2066/45263 545:References 306:services.) 74:Innovation 737:CiteSeerX 421:region). 277:systems.) 532:Archived 514:Archived 408:and the 78:services 44:May 2011 682:Futures 435:Germany 419:Uusimaa 337:pay per 240:FUTURES 143:INFORMS 121:Finnish 834:Design 739:  451:Forfás 443:Norway 439:Canada 632:(PDF) 462:Notes 430:SERVE 426:TEKES 147:ISSIP 125:TEKES 80:, in 441:and 410:OECD 404:The 347:demo 119:The 747:doi 690:doi 666:doi 609:hdl 601:doi 485:doi 76:in 830:: 745:, 733:28 731:, 686:25 684:, 662:52 660:, 607:, 597:23 595:, 481:14 479:. 317:.) 145:, 103:). 767:. 749:: 692:: 668:: 611:: 603:: 491:. 487:: 375:“ 57:) 51:( 46:) 42:( 36:.

Index

promotes the subject in a subjective manner
Learn how and when to remove this message
Innovation
services
technological innovation
service design
paraprofessionals
Finnish
TEKES
INFORMS
ISSIP
"service factory" approach
industrialized

Manchester Institute of Innovation Research

economies of scale
Electronic data interchange
self-servicing
product-service system
European Commission
OECD
knowledge intensive business services
Uusimaa
Germany
Canada
Norway
Forfás
doi
10.1142/S1363919610002878

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