Growth and prosperity come from services Ian Miles Professor of Technological Innovation & Social Change Centre for Service Research & MIoIR Manchester Business School

Thanks, Greetings to AMSI from Manchester

Why is the moment right? We’re having to rethink our economic fundamentals in the light of the economic and environmental crises. We’ve been complacent about the transition to a service economy – but critical about our innovative capacity. Its necessary to go back to basics in thinking about services - and about innovation.

We’re having to rethink our economic fundamentals in the light of the economic and environmental crises.

We’ve been complacent about the transition to a service economy – but critical about our innovative capacity.

Its necessary to go back to basics in thinking about services - and about innovation.

Why is the moment right? We’re having to rethink our economic fundamentals in the light of the economic and environmental crises. We’ve been complacent about the transition to a service economy – but critical about our innovative capacity. Its necessary to go back to basics in thinking about services - and about innovation.

We’re having to rethink our economic fundamentals in the light of the economic and environmental crises.

We’ve been complacent about the transition to a service economy – but critical about our innovative capacity.

Its necessary to go back to basics in thinking about services - and about innovation.

Back to basics: Service as product ( the service), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey). Innovation as output ( the innovation), 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  Innovation DOING USEFUL THINGS (as opposed to MAKING USEFUL THINGS – goods) DOING BETTER (products or processes…) DOING THINGS BETTER , DOING BETTER THINGS

Back to basics:

Service as product ( the service), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey).

Innovation as output ( the innovation), 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  Innovation All the terms are highly ambiguous: Service as product ( the service), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey). DOING USEFUL THINGS Innovation as output ( the innovation), as process (innovation management), as philosophy (innovation orientation). DOING BETTER. Service innovation : new service development; service elements of innovation; innovation within service organisations; innovation through services. DOING THINGS BETTER , DOING BETTER THINGS

All the terms are highly ambiguous:

Service as product ( the service), as production and delivery (the service process), as philosophy (service orientation), as encounter (service journey). DOING USEFUL THINGS

Innovation as output ( the innovation), as process (innovation management), as philosophy (innovation orientation). DOING BETTER.

Service innovation : new service development; service elements of innovation; innovation within service organisations; innovation through services. DOING THINGS BETTER , DOING BETTER THINGS

Varieties Of Service What they are doing: transforming people, artefacts, symbols Who are they doing it with: services among highest- and lowest-skilled sectors Who they do it for: consumer services, public services, business services How they are organised – in-house, outsourced, offshored; large and small organisations, network organisations… Differences in innovation (process)

What they are doing: transforming people, artefacts, symbols

Who are they doing it with: services among highest- and lowest-skilled sectors

Who they do it for: consumer services, public services, business services

How they are organised – in-house, outsourced, offshored; large and small organisations, network organisations…

Differences in innovation (process)

We know that: Service sectors are the bulk of our economies. The most rapid growth has come from knowledge-intensive business services. These support the whole economy, and thus growth, competitiveness, quality of life – and will be vital for sustainability, too. They do this through their roles in innovation, supplying knowledge to support efficiency and flexibility – and to help adaptation and creativity.

Service sectors are the bulk of our economies.

The most rapid growth has come from knowledge-intensive business services.

These support the whole economy, and thus growth, competitiveness, quality of life – and will be vital for sustainability, too.

They do this through their roles in innovation, supplying knowledge to support efficiency and flexibility – and to help adaptation and creativity.

(Side-Note on Service Trade) Average annual change in OECD service exports 1999–2004 Source: William Cave (2006 OECD WP), from OECD TIS 2006 Total service exports 2004: $2234bn – Half of which is Travel & Transport ; Focus of trade : 1/3 trade intra-Europe, ½ intra- Europe and N America Distance is more important for services trade than for goods trade About 20% of all trade is services – fairly static share– well below economic scale of services

We know that: Service sectors innovate in different ways - This varies across sectors: high-tech KIBS are much like other high-tech firms (R&D and technology acquisition). Otherwise innovation management (esp. R&D management structures) is rare outside of the biggest service firms. Professional KIBS (and creative services) are also very innovative, but based more on professional networks and in-practice ad-hoc innovation. Public services have distinctive patterns. Some other services are fairly low in terms of innovation, other than that related to new equipment and software – though innovation* is understated in standard statistics – and poor links to wider innovation systems. Organisational change is relatively more important (though technological innovators also tend to be organisational innovators). Skill needs are challenging. * and R&D

Service sectors innovate in different ways -

This varies across sectors: high-tech KIBS are much like other high-tech firms (R&D and technology acquisition).

Otherwise innovation management (esp. R&D management structures) is rare outside of the biggest service firms.

Professional KIBS (and creative services) are also very innovative, but based more on professional networks and in-practice ad-hoc innovation.

Public services have distinctive patterns.

Some other services are fairly low in terms of innovation, other than that related to new equipment and software – though innovation* is understated in standard statistics – and poor links to wider innovation systems.

Organisational change is relatively more important (though technological innovators also tend to be organisational innovators).

Skill needs are challenging.

* and R&D

We also know that: Service elements are important for ALL sectors: Production services Product services Servicisation Customer service orientation Innovation in these elements is poorly measured and understood - with a few exceptions (Information Systems, ecommerce, logistics…) Innovation management at firm level often fails to deal with these elements. Skill needs are, again, challenging. General need to combine managerial, domain, technology and service capabilities.

Service elements are important for ALL sectors:

Production services

Product services

Servicisation

Customer service orientation

Innovation in these elements is poorly measured and understood - with a few exceptions (Information Systems, ecommerce, logistics…)

Innovation management at firm level often fails to deal with these elements.

Skill needs are, again, challenging. General need to combine managerial, domain, technology and service capabilities.

How KIBS function Client Problems Client Problems Generic Knowledge KIBS communities “Science Base” Technology and training providers Client Problems Local knowledge derived from client

Advancing the study of service innovation Service/Innovation Policymakers Service Providers Generic Knowledge KIBS communities Services and Innovation Research Communities Technology and training providers Service Providers Specific innovation experiences, including action research

The Time is Right… …and the needs are apparent. Knowledge generation and action is required at many levels. Networking of research communities Cooperation within and across service sectors and service practitioners more generally Initiatives from policy and other stakeholders at city and city-region levels. Link to Grand Challenges and emerging social practice.

…and the needs are apparent.

Knowledge generation and action is required at many levels.

Networking of research communities

Cooperation within and across service sectors and service practitioners more generally

Initiatives from policy and other stakeholders at city and city-region levels.

Link to Grand Challenges and emerging social practice.

End of Presentation