research for innovative service smes

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Introduction to service innovation for a workshop on research requirements for service SMEs

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  • 1.Service Innovation: doing things better and doing new things Ian MilesProfessor of Technological Innovation & Social Change Centre for Service Research& MIoIR Manchester Business School

2. Service Innovation What? Why? How? 3.

  • Back to basics - thePRACTICES/PROCESSESof:
  • Service as product ( theservice), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey).
  • Innovation as output ( theinnovation), as process (innovation management), as philosophy (innovation orientation).
  • Service innovation : new service development; service elements of innovation; innovation within service organisations; innovation through services.

Service and InnovationDOING USEFUL THINGS (as opposed to MAKING USEFUL THINGS goods) DOING BETTER(products or processes) DOING THINGS BETTER ,DOING BETTER THINGSWhat? What? 4.

  • Back to basics - thePRODUCTS/OUTPUTSof:
  • Service as product ( theservice), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey).
  • Innovation as output ( theinnovation), as process (innovation management), as philosophy (innovation orientation).
  • Service innovation : new service development; service elements of innovation; innovation within service organisations; innovation through services.

Service and InnovationUSEFUL CHANGES in people or things (rather than selling THINGS for users to make their own changes with) BETTER VALUEPROPOSITIONS (quality, cost, functionality) NEW/IMPROVED CHANGES, or WAYS OF MAKING CHANGES, in people or things 5. Services: Pervasive Uptake of Information Technology Labour -intensive The trend, especially since the 1980s, is for all services to become more technology-intensive which often meansinnovationin service production and delivery processes*;much back-office use of PCs, networks, etc.Transaction & interaction innovations many services have to adopt: [1]electronic cash systems [2]modern communications credit and debit cards, mobile phonesonline transactions, etc.websites, etc.One driver of innovations is simply to keep abreast of customer expectations(and what competitors are doing to meet them) 6. Varieties of Service 1 Labour -intensive The trend, especially since the 1980s, is forall servicestobecome more technology-intensive which often means innovationin service production and delivery processes;still there are services that are evidently more or less.... Technology-intensive People-intensive 7. Varieties of Service 1 Labour -intensive The trend, especially since the 1980s, is forall servicestobecome more technology-intensive which often means innovationin service production and delivery processes;still there are services that are evidently more or less.... Some services are supporting technology (telecomms, systems integration) or heavily reliant on capital equipment (transport) Some services are highly dependent on people supplying the service to consumers (trade, personal,business services) Technology-intensive People-intensive 8. Varieties of Service 2 Some people-intensive services involve very high levels of highly qualified labour (professional services, social services) Others depend on large numbers of formally unskilled staff (retail, horeca) Knowledge-intensive Labour-intensive Technology-intensive People-intensive Technology-intensive People-intensive 9. Varieties of Service 2 Typically there are exceptions - IT-intensive require manyhigh skills Some people-intensive services involvevery high levels of highly qualified labour knowledge workers changing states of data, information. Others depend on large numbers of formallyunskilled staff often making changes in physical states Typically there are exceptions - motor-intensive uselow or mixed skill levels Knowledge-intensive Labour-intensive Technology-intensive People-intensive Technology-intensive People-intensive 10. Varieties of Service 3 Services involve their customers Sevices may be more or less standardised, mass produced But consumer involvement may be more or less intense and interactive Services may be specialised, bespoke, customised to specific user requirements Knowledge-intensive Labour-intensive Technology-intensive People-intensive standardised specialised standardised specialised Technology-intensive People-intensive 11. Varieties of Service 3 Services involve their customers Innovation may need to build on the role of the customer in coproducing the service Innovationmay aim to simplify, or to provide more value-added Services may be specialised, bespoke, customised to specific user requirements Knowledge-intensive Labour-intensive Technology-intensive People-intensive standardised specialised standardised specialised Technology-intensive People-intensive 12. So: what is your service? (you may even be a manufacturer supplying services) ? Knowledge-intensive Labour-intensive Technology-intensive People-intensive standardised specialised standardised specialised Technology-intensive People-intensive 13. So: what is your service? (what knowledge might you need from R&D?) Networks andsystems, logistics, mech. eng. Specific domains informatics, engineering, architecture, environment Specific domains financial, economic, social, legal, aesthetic, organisational, Social, demographic, cultural, human relations Applications and design of technology, systems, interfaces Knowledge-intensive Labour-intensive Technology-intensive People-intensive standardised specialised standardised specialised Technology-intensive People-intensive 14. Diverse service innovations

  • Physical or electronic delivery of the service
  • Standardisation and modularisation: increase scale and efficiency, increase scope and flexibility (new services)
  • Adding physical components to informational services, adding information and experience components to physical ones
  • Apply new technology to new or improved services
  • Use knowledge of (changing) organisations and customers (and their technology) to create new services
  • Interaction with customers: new ways of jointly producing service

Knowledge-intensive Labour-intensive Technology-intensive People-intensive standardised specialised standardised specialised 15.

  • Competition
    • Keeping ahead
    • Less sheltered markets
  • Moresatisfiedcustomers and staff
    • More reliable / stable demand and retention
  • Demandsfrom business or consumers, changing social circumstances
  • New technological or marketopportunities
    • Expansion, cost-reduction
  • Environmentaldrivers
  • Regulations

Why?Drivers But SMEs face serious constraints: Lack of finance, time, capacity, skills, partners Driving Innovation:see(k)ing models elsewhere Why? 16. How?1

  • Service sectorsinnovatein different ways -
  • This varies across sectors: high-tech KIBS are much like other high-tech firms (R&D and technology acquisition driving innovation).
  • Otherwise formal innovation management (esp. R&D management structures) is rare, outside of the biggest service firms.(Whose use of knowledge management, service design tools, etc., is worth watching)

How? 17. R&D use (rather old CIS data) UtilitiesWholeTransTeleFinanceComputerTechnicalsaleportcomms S= 10-49 employees M=50-249 employees L=250+ employees Data for EU15 18. How?and how to augment?

  • Professional KIBS , social and creative services are very innovative.Typically use professional networks as sources of ideas, and in-practice ad-hoc innovation dealing with problems.May create innovations for their clients to use.
  • Organisational change is relatively more important to services (though: technological innovators also tend to be organisational innovators; & often the two are intertwined).
  • Many services are supplier-driven innovation from the adoption of new equipment and software though adopters can also be creative users.
  • Consumers and clients, as well as staff, can be important sources of innovation and often have to be engaged in the process of creating or rolling out new services.

19. How? Skills and Knowledge

  • General need to combine managerial, domain (user and market knowledge), technology and service (product, process, quality) capabilities the T-shaped person, cross-professional, interdisciplinary.
  • Many services have poor links to wider innovation systems, lack of heritage in using and performing research.
    • Much R&D not designed for services (this has been recognised by new programmes to some extent)
    • Service firms do not know where to go esp. SMEs
    • Role of specialised consultancies, professional networks

20. Knowledge for Diverse innovations

  • Physical or electronic delivery of the service
  • Standardisation and modularisation: increase scale and efficiency, increase scope and flexibility (new services)
  • Adding physical components to informational services, adding information and experience components to physical ones
  • Apply new technology to new or improved services
  • Use knowledge of (changing) organisations and customers (and their technology) to create