Handbook of Service Innovation (eBook)

Renu AgarwalRenu Agarwal is a Senior Lecturer in Innovation and Service Operations Management at UTS Business. Renu has extensive industry experience and in her current faculty position, Renu provides leadership in the disciplinary fields of service innovation, service value networks, supply chain management, dynamic capability building, management practices, management education, and innovation and productivity. She has been instrumental in managing several federal and state government project grants on management practices for both Australia and New Zealand working in collaboration with London School of Economics, McKinsey and Stanford University. Currently, Renu is involved in the Australian Leadership capability Standard and the Regional High Performance Networks Programs, Centre for Workplace leadership, as well as Service Innovation: developing business models for future Value Chains theme, part of the Wealth from Waste CSIRO Flagship Cluster project. Renu has published in top tier international journals which include the Decision Sciences, International Journal of Production Economics, Education + Training Journal, International Journal of Operations Management, and International Journal of Production Research. Willem Selen Willem Selen is Professor of Management at the University of the Sunshine Coast, which he joined in Jan 2014. Prior to this he held professorial and senior academic management positions in Australia, Belgium, Saudi Arabia, The Netherlands, TRNC, UAE, and the USA as part of his more than 30 years in academia. He holds Bachelor and Master degrees in Commercial Engineering from Limburg University (Belgium), and a Ph.D in Business Administration from the University of South Carolina.Willem has a broad research interest, which includes (service) operations management and supply chain management, and service networks and capability building, among others. He has published widely in the supply chain and service operations areas, and serves on the editorial board of the International Journal of Procurement Management. Previously he served as editor and guest-editor of a number of journals, including Journal of Operations Management.Professor Selen has worked with numerous industry organisations, such as Opel Belgium in the automotive sector in Europe, where he engaged in productivity improvement projects. Göran Roos Göran Roos chairs the Value Added and Industry Growth subcommittee of the Economic Development Board of South Australia; is a member of the Council for Flinders University, and CSIRO’s Manufacturing Sector Advisory Council. He is also a Stretton Fellow appointed by the City of Playford at University of Adelaide; Professor in Strategic Design in the Faculty of Design, Swinburne University of Technology, Melbourne, Australia; Adjunct Professor at Mawson Institute, University of South Australia, Adelaide, Australia; Adjunct Professor at ECIC, University of Adelaide, South Australia; Australia; Adjunct Professor at University of Technology Sydney Business School, Australia; and Adjunct Associate Professor in the College of Business, Nanyang Business School, Nanyang Technological University, Singapore. Göran is one of the founders of modern intellectual capital science and a recognised world expert in this field as well as a major contributor to the thinking and practice in the areas of strategy and innovation management as well as industrial and innovation policy. He is a member of the editorial board of the Journal of Human Resource Costing and Accounting; the International Journal of Strategic Change Management; the International Journal of Learning and Intellectual Capital and the Journal of Intellectual Capital. Göran was appointed “Manufacturing for the Future” Thinker in Residence by the South Australian Premier for the year 2011 and an appointed member of the Prime Minister’s Manufacturing Leaders Group 2012/2013 and he was selected for Committee for Economic Development of Australia (CEDA) Top 10 Speeches 2013.Roy GreenRoy Green is Dean of the UTS Business School at the University of Technology Sydney. His doctorate is from the University of Cambridge, where he was also a Research Fellow, and he has worked in universities, business and government in Australia and overseas. He was previously Dean at the National University of Ireland and Macquarie Graduate School of Management. Roy has published widely in the areas of innovation policy and management and has undertaken multi-country projects with the OECD and European Commission.Roy chaired the Australian Government’s Innovative Regions Centre, CSIRO Manufacturing Sector Advisory Council and NSW Manufacturing Council, and served on the Prime Minister’s Manufacturing Taskforce, Enterprise Connect Advisory Committee and ABS Innovation Reference Group. He conducted the Government’s review of the Textile, Clothing and Footwear industries, led Australian participation in a global study of management and productivity, coordinated an Australian Business Deans Council initiative on the future of management education and has co-authored recent reports on productivity, skills and innovation. Currently, Roy is involved in the Australian Design Integration Network, the Work Integrated Learning taskforce of Universities Australia and a project on future prospects for the car components sector.

Endorsements 5
Preface 11
Acknowledgment 18
Contents 19
Authors’ Biography 23
Part I Innovation Definitions, GovernanceStructure, and Literature 39
1 Innovation: A Critical Assessment of the Concept and Scope of Literature 42
Abstract 42
1 Introduction 42
2 What Is Innovation? 43
3 Type of Innovation 46
4 Degree of Innovativeness 49
5 Dimensions: Individual---Group---Network 50
6 Antecedents of Innovation 53
7 The Specificity of Service Innovation 54
8 Problems in Innovation Research 57
9 Conclusion 58
Acknowledgments 59
References 59
2 Service Innovation: A Review of the Literature 63
Abstract 63
1 Background 64
2 Service Innovation: An Overview 65
2.1 Service Innovation and Its Characteristics 65
2.2 Classification of Service Innovation 67
3 The Dynamic and Systemic Process of Service Innovation 69
3.1 Service Design and New Service Development 69
3.2 Open and Collaborative Processes of Service Innovation 70
3.3 Customer as a Co-creator of Service Innovation 71
3.4 Systemic Diffusion of Innovation Through Service Value Networks 72
4 Management of Service Innovation 74
4.1 Dynamic Capability Building for Service Innovation 74
4.2 Managing Organizational Knowledge and Learning for Service Innovation 75
4.3 Creating an Organizational Culture for Service Innovation 76
4.4 Measurement of Service Innovation and Its Outcomes 77
5 Conclusion 79
References 79
3 Open Service Innovation: Literature Review and Directions for Future Research 88
Abstract 88
1 Introduction 88
2 Alliances and Service Innovation 89
2.1 Innovation Outcomes 90
2.2 Alliance Structure 91
2.3 Partner Characteristics 92
2.4 Partner Interaction 93
2.5 Active Innovation Management 94
3 Alliance Portfolio and Service Innovation 94
3.1 Innovation Outcomes 94
3.2 Portfolio Configuration 96
3.3 Partner Characteristics 96
3.4 Partner Interaction 97
3.5 Active Innovation Management 97
4 Alliance Network and Service Innovation 98
4.1 Innovation Outcomes 98
4.2 Network Structure 100
4.3 Partner Characteristics 100
4.4 Partner Interaction 101
4.5 Active Innovation Management 102
5 Discussion and Conclusion 103
5.1 A Multi-level Framework of Open Service Innovation 103
5.2 Future Research Topics 104
5.3 Conclusion 105
References 106
4 Towards an Understanding of Open Innovation in Services: Beyond the Firm and Towards Relational Co-creation 110
Abstract 110
1 Introduction 111
1.1 Service Trends 111
1.2 Complex Environments and Wicked Problems 112
2 Service Innovation and the Design Thinking Process 113
2.1 Service Innovation in a Relational Value Network 113
2.2 Service Innovation Through a Design Thinking Process 114
3 Open Service Innovation---A Conceptual Framework for Services Innovation Co-creation 115
3.1 Open Innovation 115
3.2 Open Service Innovation 116
4 Cases of Service Innovation Co-creation 118
4.1 Competitive Co-creation 118
4.1.1 Open IDEO: Co-created Professional Services 119
4.2 Community-Based Competition Co-creation 119
4.2.1 Threadless Case: Co-created Product Design 120
4.3 Open Source Co-innovation 120
4.3.1 Wikipedia Case 121
4.4 Service Exchange as Open-Creation 121
5 Dimensions of Co-creation Services and Implications for Firm Performance 122
6 Conclusion 123
References 123
5 Exploring a Multidimensional Approach to Service Innovation 126
Abstract 126
1 Introduction 127
2 The Challenge of Characterizing Service Innovation 128
2.1 A Multidimensional Approach to Services 130
2.2 Unexploited Potential of a Multidimensional Approach to Service Innovation: An Hypothesis About Radical Change 132
3 An Empirical Assessment of Radical Multi-dimensional Changes 134
3.1 Measuring Service Innovation Dimensions 134
3.2 Dimensionality Versus Market Success 135
4 The Future of Multidimensional Conceptualizations 137
5 Conclusion 140
References 141
6 Innovation, Service Types, and Performance in Knowledge Intensive Business Services 144
Abstract 144
1 Introduction 144
2 Service Innovation in KIBS 145
3 The Relationship Between Service Innovation and Service Types 146
4 The Complementarity Between KIBS Customization and Standardization/Modularization 148
5 Causality Redefinition Through the Configurational Approach 149
6 Outcomes from a Fuzzy Set Qualitative Comparative Analysis (fs/QCA) 150
7 Managerial Implications 152
8 Conclusion 154
Acknowledgments 154
References 154
Part IISkills and Capability Buildingin Service Innovation 157
7 On the Way to a Systematic Service Innovation Competence Framework 160
Abstract 160
1 The Relevance of Service Innovation Competences 160
2 Service Innovation Competences and Systematic Service Innovation 162
3 Developing a Service Innovation Competence Framework 164
3.1 Necessity of Developing a Framework 164
3.2 Theoretical Foundation 164
3.2.1 Resource-Based View and Competence-Based Perspective 165
3.2.2 The Service-Dominant-Logic Perspective 167
3.2.3 Developing Crucial Categories of Competences 168
3.3 Empirical Findings: A Pilot Case Study 168
3.4 Developing a Framework for Crucial Service Innovation Competences 170
3.4.1 Category of Employee Competences 170
3.4.2 Category of Organizational Competences 171
3.4.3 Category of Network Competences 171
3.4.4 Category of Community Competences 172
4 Practical Implications 173
5 Conclusion 174
5.1 Implications for Further Research 174
References 174
8 Service Innovation Capabilities for Idea Assessment: An Appraisal of Established and Novel Approaches 178
Abstract 178
1 Introduction 179
2 Idea Assessment in Service Innovation Capabilities Frameworks 181
3 Cornerstones of Service Idea Assessment 184
3.1 Assessment Criteria 185
3.2 Information Sources 186
3.3 Assessment Group Composition and Assessment Perspective 187
3.4 Assessment Approach 188
3.5 Summary Discussion 191
4 Novel Approaches to Idea Assessment in Service Firms 191
4.1 Serious Games 192
4.2 Enterprise Crowdfunding 194
5 Conclusion 196
References 197
9 Employees and Users as Resource Integrators in Service Innovation: A Learning Framework 201
Abstract 201
1 Introduction 202
2 Perspectives on User-Driven and Employee-Driven Innovation in Services 203
2.1 User-Driven Views on Innovation 204
2.2 Employee-Driven Views on Innovation 204
2.3 A Need for an Integrative Perspective 205
3 Service-Dominant Logic Applied in the Innovation Framework 206
3.1 Short Summary of the Core Propositions of S-D Logic 206
3.2 Linkages of S-D Logic to Innovation 207
4 Effectuation and Bricolage as Frameworks to Tackle the Uncertainties in Innovation 208
5 Development of Value Co-creation: The Theory of Expansive Learning 209
6 Integration of Resources as a New Perspective in Innovation Management 210
7 Learning-Based Resource Integration in Practice: Two Case Examples 211
7.1 Invisibility of the Creation and Use of Resources as an Analytical Challenge 211
7.2 Data and the Case Study Methodology 212
7.3 Results: Development of Resource Integrator Roles and the Co-creation of use Value in Two Cases 214
7.3.1 Elderly Day Club: Emergence of Collaborative Resource Integration of Employee and Elderly 215
7.3.2 Forest Preschool: Emergence of Collaborative Resource Integration of Employees, Managers, Children, and Parents 216
7.3.3 Summary of the Two Cases in the Critical Phase of Resource Integration 217
8 Conclusion 219
References 221
10 Foresight and Service Design Boosting Dynamic Capabilities in Service Innovation 225
Abstract 225
1 Introduction 225
2 Service-Logic-Based Innovation Calls for New Capabilities 228
3 Why Are Futures Thinking and Design Thinking Needed in Service Innovation? 230
3.1 Principles of Futures Thinking 230
3.2 Principles of Design Thinking 232
3.3 Synergies Between Futures Thinking and Design Thinking 233
4 A New Framework: Service Innovation Process Grounded on Foresight and Service Design 234
4.1 Phase 1: Map and Understand 235
4.2 Phase 2: Forecast and Ideate 236
4.3 Phase 3: Model and Evaluate 237
4.4 Phase 4: Conceptualize and Influence 239
5 Conclusion 240
References 241
11 Employment and Skill Configurations in KIBS Sectors: A Longitudinal Analysis 245
Abstract 245
1 Introduction 245
2 Knowledge-Intensive Business Services 246
2.1 Background 246
2.2 Main Drivers of KIBS Growth 247
2.2.1 Outsourcing 248
2.2.2 New Technology 249
2.2.3 Regulation and Globalization 249
2.3 Shifting Perspectives on Knowledge Services 250
3 Heterogeneity and Sectoral Diversity 253
4 KIBS Employment and Skills 255
4.1 Data Description 255
4.2 Employment Structure 256
4.3 Skill Configurations 259
5 Conclusion 262
References 264
12 Dynamic Capabilities for Service Innovation in Service Systems 268
Abstract 268
1 Role of Human Capital in Skills and Capability Building 269
2 The Role of Networks in Partnering Organizations 270
3 Service Innovation in a Service System 270
3.1 Service Innovation as an Elevated Service Offering 273
4 Dynamic Capabilities Needed to Build Service Innovation 273
4.1 Organizational Relationship Capital 275
4.2 Collaborative Organizational Learning 275
4.3 Customer Engagement 276
4.4 Entrepreneurial Alertness 276
4.5 Collaborative Agility 276
4.6 Collaborative Innovative Capacity 277
5 Conclusions 277
References 278
Part IIITechnological Developmentsin Service Innovation 281
13 Role of Web 3.0 in Service Innovation 283
Abstract 283
1 Introduction 283
1.1 Benefits of Web 3.0 284
1.2 What Makes Web 3.0 Different 285
2 Drivers of Innovation 288
3 Technology Enablers for Innovation 289
3.1 Web 1.0 291
3.2 Web 2.0 292
3.3 Web 3.0 295
4 Web 3.0 Driving Innovation 297
4.1 Asian Innovation 298
4.2 The Value Proposition 299
4.3 Semantic Innovation Management 299
4.4 Emergent Analytics 300
4.5 Semantic Analytics: The Capability to Ask More Complex Questions 301
4.6 Open Data 301
4.7 Smarter Computing Through Web 3.0 302
4.8 The Potential of Semantic Technologies 304
4.9 Innovating Societal Norms? 305
4.10 Innovation of Personal Search: Telling Customers What to Do 306
4.11 Innovation for Manufacturing 306
5 E-Science as the Talent Enabler 307
6 Conclusion 307
References 307
14 Service-Oriented Architecture as a Driver of Dynamic Capabilities for Achieving Organizational Agility 311
Abstract 311
1 Introduction 311
2 Service-Oriented Architecture and Dynamic Capabilities 313
3 An Analytical Framework of SOA as an Enabler of Dynamic Capabilities 314
3.1 Integration of Internal Assets 315
3.2 Integration of External Resources 316
3.3 Rapid Product Development 316
3.4 Learning 316
3.5 Creation of Assets 317
4 Empirical Assessment of the SOA-DC Conceptual Framework 317
4.1 Integration of Internal Assets 318
4.2 Integration of External Resources 319
4.3 Rapid Product Development 320
4.4 Learning 320
4.5 Creation of Assets 321
5 Conclusion 321
References 324
15 Disruptive Digital Innovation in Healthcare Delivery: The Case for Patient Portals and Online Clinical Consultations 327
Abstract 327
1 Introduction 328
1.1 Service Innovation in Health Care 328
1.1.1 Types of Innovations in Healthcare Delivery 328
1.1.2 Theories of Service Innovation 329
1.1.3 Digital Innovations in Health Care 330
1.1.4 Disruptive Innovations in Primary Care 331
2 Patient Portal 332
2.1 What Is a Patient Portal? 332
2.2 Patient Portal and Service Innovation 333
2.3 Examples of Patient Portals 334
3 Online Medical Consultation 335
3.1 What Are Online Medical Consultations? 335
3.2 Current Practice 336
3.3 Analogy to Other Industries 338
4 Secure and Structured eVisit and Patient Portal 339
5 Future of Medical Service in Primary Care Setting 342
5.1 Multiple Models of Online Care Delivery 342
5.2 Barriers and Solutions 344
References 345
16 Technology-Driven Service Innovation in the Banking Industry 349
Abstract 349
1 Introduction 349
2 Overview of the Banking Industry in Australia 351
3 Financial Deregulation and Technological Change 354
4 Service Innovation within the Banking Industry 360
4.1 Service Innovation 361
4.2 Innovation in Service Products 362
4.2.1 Case Study: EFTPOS and Smart Phone Adaptation 362
4.3 Innovation in Service Processes 363
4.3.1 Case Study: Internet Banking 363
4.4 Security Issues with Innovation 365
5 The Future of Banking 366
5.1 Innovations in Banking 366
5.2 How Should Banks Respond to Technological Change? 368
5.3 Barriers to Innovation? 369
6 Conclusion 370
References 370
Part IVDesigning Service Innovation 374
17 Systemic Development of Service Innovation 377
Abstract 377
1 Introduction 378
2 Characteristics of Services and Service Innovations 378
2.1 The Front End and the Back End 380
3 Toward a Systemic Development of Service Innovation 381
4 Understanding Service Systems 383
4.1 Service Matrixes 384
5 Developing Service Strategies and Business Models 386
5.1 Challenges in Service Business Model Development 389
5.1.1 The Scope and Scale of Services 389
5.1.2 Service Platforms and Internet Business Models 390
6 Creating New Meanings Through Service Design 391
6.1 Design Thinking and Radical Service Innovation 392
7 Conclusion 395
References 397
18 The Role of Socio-Technical Experiments in Introducing Sustainable Product-Service System Innovations 400
Abstract 400
1 Introduction 400
1.1 Transition Toward Sustainability and the Need of Radical Innovations 400
1.2 Product-Service System Innovation as a Promising Model for Sustainability 401
1.3 Research Challenge 402
1.4 Chapter Organization 403
2 The Challenge of Implementing Sustainable Product-Service System Innovations 404
3 Insights from Transition Studies 405
3.1 Dynamics in Socio-Technical Transitions 405
3.2 The Role of Socio-Technical Experiments in Triggering Radical Innovations 406
4 Research Questions and Approach 409
5 Implications for PSS Design and Management 411
5.1 Cape Town Sustainable Mobility Project 411
5.1.1 Project Background 411
5.1.2 Incubation 412
5.1.3 Socio-technical experimentation 414
5.1.4 Main Intermediate Project Results and Next Steps 419
5.2 A New Design and Management Approach: Designing Transition Paths and Socio-Technical Experiments 419
6 Conclusion 425
References 426
19 Servitization as Innovation in Manufacturing---A Review of the Literature 429
Abstract 429
1 Concept Introduction 430
2 Why Do Firms Servitize? 430
3 Servitization as Innovation in Manufacturing Firms 435
4 What Services to Offer? 443
5 How to Servitize 446
6 Challenges in Servitizing 453
7 Conclusions 453
References 454
20 The Architecture of Service Innovation 462
Abstract 462
1 Prolegomena 462
2 The Innovator's Lens 463
2.1 Understanding Service Innovation Through the Lens of Architecture 464
2.2 Structure: Approach 465
2.3 Foundation: From Products and Services to Architecture 466
2.3.1 Architecture as a Product 466
2.3.2 Architecture as a Service 466
2.3.3 Architecture as a Bifocal Lens 468
3 What the Greeks Knew 468
3.1 The Parthenon: A Service Innovation 469
3.2 Services as Instruments for Experience 470
4 What the Romans Knew 470
4.1 (Firmitas) Structure and Sustainability 471
4.2 (Commoditas) Function 473
4.3 (Venustas) Experience 473
5 Five Models for Service Design and Innovation 474
5.1 The Primacy of Effect and Experience 474
5.2 The Fetish of Structure/Process/Systems 475
5.3 The Primacy of Power and Sequence 476
5.4 Dynamic Experience 477
5.5 Structure and Skin 478
6 Conclusion 479
References 479
21 Innovation or Resuscitation? A Review of Design Integration Programs in Australia 482
Abstract 482
1 Introduction 483
1.1 The Changing Role of the Designer 483
2 Design Integration 486
2.1 What Is Design Integration? 486
2.1.1 The Problem of Evaluation 486
3 Identifying International Best-Practice 487
3.1 Europe 487
3.1.1 Denmark 487
3.1.2 United Kingdom 488
3.2 Asia Pacific 488
3.2.1 Asia 488
3.2.2 New Zealand 489
4 Design Integration Programs in Australia: A Case Study 490
4.1 Victoria 492
4.1.1 Victorian Design Integration Policy Discourse 492
4.1.2 Victoria's Design Integration Program Objectives and Delivery Method 492
4.1.3 Current Status of Victoria's Design Integration Program 494
4.2 Design Integration Initiative in Queensland 495
4.2.1 Queensland's Design Integration Program Objectives and Delivery Method 496
4.2.2 Current Status of Design Integration Programs in Queensland 497
4.3 Design Integration Programs in New South Wales and South Australia 498
4.3.1 Current Status of the Program 499
5 Conclusion 499
References 502
22 Service Innovation Through an Integrative Design Framework 505
Abstract 505
1 Introduction 505
2 Conceptual Building Blocks 507
2.1 Process for Capabilities Integration 507
2.2 Value Co-creation in a Digital Ecosystem 507
2.3 Customer Centricity for Service Excellence 508
3 Proposed Integrative Service Design Framework 509
3.1 Service Strategy 510
3.2 Service Concept 510
3.3 Service Design 511
3.4 Customer Experience 513
3.5 Service Architecture 515
4 Exemplar Integrative Service Design Practices 517
5 Conclusion 521
References 522
23 Services Innovation in a Circular Economy 525
Abstract 525
1 Introduction 526
2 Concepts Captured by the Circular Economy 526
3 Identifying Services: Minimising and Value Adding 528
4 Environmental Sustainability 529
5 Product-Service Systems and the Circular Economy 531
6 Service Development Frameworks 534
7 Sustainability and Business Models 535
8 Conclusions 538
References 539
Part VManagement Issues in ServiceInnovation 545
24 Illuminating the Service Provider's Strategic Mandate on Realizing Apt Quality and Value Through Service Innovation 547
Abstract 547
1 Introduction 547
2 Service Innovation, New Service Development, and Service Operations Management Logic 549
3 The Symphony Orchestra: A Context for Studying Service Innovation Management 552
4 Research Method 554
5 Research Findings to Advance Service Innovation Understanding and Theorization 555
6 Conclusion 564
References 565
25 Co-creative Practices in Service Innovation 568
Abstract 568
1 Introduction 569
2 Co-creative Practices in Insight Generation 572
2.1 Co-creative Character 1: Improvisation in Insight Generation 573
2.2 Co-creative Character 2: Staging Events for Insight Generation 573
2.3 Co-creative Character 3: Playfulness in Insight Generation 574
2.4 Co-creative Method/Tool 1: Probes in Insight Generation 575
2.5 Co-creative Method/Tool 2: Contextmapping in Insight Generation 575
2.6 Co-creation Example 1: Seeking Insights from the Context with Probes 576
2.7 Co-creation Example 2: Improvised Scenarios in Use Context 577
2.8 Co-creation Example 3: Changing Roles While Improvising 578
2.9 Co-creation Example 4: Insight Generation Through Storytelling 579
2.10 Summing up Insight Generation 580
3 Co-creative Practices in Concept Exploration and Development 581
3.1 Co-creative Character 4: Reflective Dialogue in Concept Exploration 581
3.2 Co-creative Character 5: Situating Events for Concept Exploration 582
3.3 Co-creative Method/Tool 3: Speed Sketching in Concept Exploration 582
3.4 Co-creative Method/Tool 4: Magical Things in Concept Exploration 583
3.5 Co-creation Example 5: Dialogue-Labs as Settings for Exploring Augmented Mood Boards 583
3.6 Co-creation Example 6: Cardboard Hospital for Prototyping Patient-Centric Environments and Services 584
3.7 Co-creation Example 7: Design Games as Setting for Concept Development 584
3.8 Summing up Concept Exploration 585
4 Co-creative Practices in Converging Towards a Specification 585
4.1 Co-creative Character 6: Open-Ended Interpretation 586
4.2 Co-creative Character 7: Prototyping Service 586
4.3 Co-creative Method/Tool 5: Service Walkthrough 587
4.4 Co-creative Method/Tool 6: Experience Prototypes 588
4.5 Co-creative Example 8: Design Probes as Experience Prototypes 588
4.6 Co-creative Example 9: Feeding Milan---Scenarios as Open-Ended Prototypes 589
4.7 Co-creative Example 10: Co-designing a Project Plan 589
4.8 Summing up Converging Towards Specification 590
5 Co-creative Practices in Transformative and Implementation Processes 590
5.1 Co-creative Character 8: Capacity Building 591
5.2 Co-creative Character 9: Transformative Platforms 591
5.3 Co-creative Example 11: Design Games as a Co-creative Structure to Organise and Facilitate Cross-Functional Collaboration and Ideation 591
5.4 Co-creative Example 12: Co-designing a Design Game for Involving Citizens in City of Vantaa 592
5.5 Co-creative Example 13: A Co-creative Tool Becomes Part of Everyday Processes 592
5.6 Summing up Transformation and Implementation 593
6 Conclusion 593
References 594
26 Managing Online User Co-creation in Service Innovation 598
Abstract 598
1 Introduction 599
2 User Co-creation and Online Service Innovations Tools 599
3 The Framework of Capabilities and Online Service Innovation Tools 600
3.1 The Three Online Service Innovation Capabilities 601
3.2 Online Service Exploration Capability 602
3.3 Online Service Conversion Capability 603
3.4 Online Service Exploitation Capability 605
4 Innovation World: A Case of Online Service Innovation 605
4.1 The Creation of New Online Innovation Capabilities and Reconfiguring of Existing Capabilities 609
5 Conclusion 610
References 611
27 Practices for Involving Organizational Customers in Service Innovation 613
Abstract 613
1 Introduction 613
2 Innovation in the Light of Service-Dominant Logic 614
2.1 From Innovation in Products and Services to Service Innovation 614
2.2 Innovating New Forms of Value Co-creation 616
3 Open Innovation and Customer Involvement 617
3.1 From In-House Innovation to Collaborative Innovation 617
3.2 Changing Innovation Practices 618
4 Methodology 620
4.1 Research Approach and Trustworthiness 620
4.2 Data Collection and Analysis 621
5 Findings 623
5.1 Practices for Customer Involvement in Service Business Development 623
5.2 In-House Development and Supplier Cooperation 623
5.2.1 Development Based on Customer Insight 624
5.2.2 Co-development with Customers 625
5.2.3 Development by Customers 626
5.3 The Use of Customer Involvement Practices 627
5.3.1 Shaping the Context of Value Co-creation 627
5.3.2 Fostering Network Effects 628
5.3.3 Living with Contingency 628
5.3.4 Engaging in Business with Meaning 629
5.4 Summary of Findings 630
6 Discussion 630
6.1 Theoretical Implications 634
6.2 Practical Implications 635
7 Conclusion 635
7.1 Limitations and Further Research 635
Acknowledgments 636
References 636
Part VIInternational Dimensions of ServiceInnovation 638
28 Services Offshoring: Location Choice and Subnational Regional Advantages in China 641
Abstract 641
1 Introduction 641
2 Service Offshoring and Service Innovation 643
3 Location Selection in Service Offshoring 646
3.1 Location Determinants of Service Offshoring Activities 646
3.2 From National Advantages to Subnational Regional Advantage 650
4 Location of Offshoring Services in Chinese Cities 653
5 Conclusion 657
References 658
29 Innovative Strategies in Servicing International Markets from Ireland 661
Abstract 661
1 Introduction 661
2 Globalisation and Transnational Networks 663
3 Offshoring and Fragmenting Value Chains 666
4 The Evolving Model of Servicing International Markets 667
5 Competing for Inward Investment 668
6 Innovative Tax Strategies 670
7 Ireland's Emerging Internationally Traded Services Sector 671
8 Company Case Studies 675
9 EMEA Servicing and Subsidiary Evolution 675
10 Conclusion 678
References 679
30 Leveraging Value Across Borders---Do `Market Place Interactions' Trump `Market Space Transactions'?: Evidence from Australian Firms in Industrial Markets 682
Abstract 682
1 Leveraging Value Across Borders---Do `Market Place Interactions' Trump `Market Space Transactions'?: Evidence from Australian Firms in Industrial Markets 683
1.1 Introduction 683
1.2 Services and Embedded Services 684
1.2.1 Services and Internationalization 686
1.3 Research Method 688
1.4 Overview of Results 690
1.4.1 Case Study 1 690
1.4.2 Case Study 2 691
1.4.3 Case Study 3 692
1.4.4 Case Study 4 693
1.5 Discussion 695
1.6 Conclusion 696
References 697
31 Frugal Services Innovation---Lessons from the Emerging Markets and an Adoption Framework for First-World Corporations and Governments 701
Abstract 701
1 Introduction 702
2 Innovation 703
2.1 Emerging Challenge to Innovation 703
2.2 Emerging Response to the Innovation Challenge 704
3 Motivation for Frugal Innovation 705
3.1 The Concept and Phenomenon of Frugal Innovation 706
3.2 Frugal Innovation as a Competitive Advantage 707
4 The Concept of Reverse Innovation 708
4.1 Impact of Reverse Innovation on Developed Economies 708
4.2 Frugal Innovation and the Changing Dynamics of Resource Allocation 709
5 Frugal Innovation in Services 710
6 Adoption Framework for the Developed Economies 711
6.1 Model for Organizations to Develop and Deploy Frugal Innovations 712
6.2 Application of the Innovation Model in the Management of Frugal Services 716
7 Conclusion 718
References 718
Part VIIService Innovation in the GovernmentSector 721
32 How to Manage a Service Innovation Process in the Public Sector: From Co-Design to Co-Production 724
Abstract 724
1 Introduction 724
2 User-Driven Innovation 726
2.1 Traditional Way to Participate in Decision Making on Services 726
2.2 A New Way to Participate in Decision Making on Services Through Service Co-Design and Co-Production 727
2.2.1 Discovery Phase 728
2.2.2 Creation Phase 728
2.2.3 Reality Check Phase 729
2.2.4 Implementation Phase 729
3 Case Study of Co-Design Services: The Lauttasaari Project 729
3.1 Design Probe as a Tool to Understand the Daily Life of the Customer 730
3.2 Services Based on Customers' Needs 731
3.3 Enabling Customers to Make Final Decisions on Services 732
4 Change Management 733
4.1 Theoretical Background 733
4.2 User-Driven Innovations as Change Drivers 736
4.3 The Lauttasaari Project Revisited: Decision Making, Change Management, and Innovation 737
4.4 The Lauttasaari Project as a Change Process 738
4.5 Lauttasaari Project as an Innovation Process 739
5 Conclusion 740
References 741
33 Innovating Universities: Technocratic Reform and Beyond 744
Abstract 744
1 Introduction 745
1.1 Structure 746
2 Interpreting Higher Education Within the Service Sector 747
2.1 Linear-Technocratic Framing and Beyond 747
2.2 Complexity Perspectives 749
3 Innovating Australian Higher Education in Practice 751
3.1 Policy Directions 751
3.2 Remaking University Governance 753
3.3 Linear-Technocratic Innovation and Academic Work 755
3.3.1 De-professionalization and Effacement of Academic Autonomy 756
3.3.2 Work Intensification and Workload 756
3.3.3 Marketizing Teaching and Learning 758
3.3.4 Increased Standardization of Teaching and Research 759
3.3.5 Casualization and Flexibilization 760
4 Conclusion 761
4.1 Beyond Corporate-Technocratic Management? 761
References 762
34 Business Model Approach to Public Service Innovation 767
Abstract 767
1 Introduction: The Diminishing Public Sector 767
2 Cross-Sector Collaboration in Public Service Innovation 769
3 The `Business Model' Concept 770
4 Six Innovative Modes of Public Service Delivery for Service Innovation: Australian Evidence 774
4.1 Privatisation 775
4.1.1 Case Study: Commonwealth Bank 775
4.2 Public Private Partnerships 776
4.2.1 Case Study: Sydney Airport Link 776
4.3 Contracting Out 777
4.3.1 Case Study: Department of Immigration and Citizenship 778
4.4 Commercialisation 778
4.4.1 Case Study: Cochlear 779
4.5 Franchising 779
4.5.1 Case Study: Sydney Ferries 780
4.6 Social Benefit Bonds 780
4.6.1 Case Study: Pilot Social Bonds in NSW 781
5 Towards a New Business Model Framework for Public Sector Innovation 781
5.1 Customer as a Key Resource 782
5.2 Innovation Ecosystem: Cross-Sector Collaboration 782
5.2.1 Stakeholders 787
5.2.2 Connections or Inter-sector Relationships 787
5.2.3 Information Sharing 787
6 Conclusion 788
A.x(118). Appendix 1 789
A.x(118).0 Overview of the Ten Existing Business Model Frameworks 789
References 792
35 Exposing an Economic Development Policy Clash: Predictability and Control Versus Creativity and Innovation 795
Abstract 795
1 Introduction 795
1.1 Identifying a Limited Portfolio of Investments in Fostering Innovative Activity 796
2 Understanding Policy Discourse 797
2.1 Policy Language---A Layering of Perspectives, Values and Meaning 798
2.1.1 Examining Policy Intention Verses Choice of Policy Instrument 799
3 Exploring the Constellations of Academic Discourses Informing Innovation Policy in South Australia 802
3.1 Endogenous Growth Theory 802
3.1.1 Successful Innovation---An Exchange and Application of Knowledge 803
4 Enculturation Within Policy Domains 804
4.1 Adopting Strategic Planning to Support Evidence-Based Policy Making 805
5 A Case Study---The South Australian Strategic Plan: Predictability and Control Versus Creativity and Innovation 806
5.1 Fostering Creativity and Innovation Across the Economy---Reality of Rhetoric? 808
6 Identify Conflicting Values in Policies and Programs to Foster Creativity and Innovation 810
7 Conclusion 814
References 816
Epilogue 819
Terminology 821