Dr Palie Smart, Senior Lecturer in Strategic Innovation Management at Cranfield University, speaking at a workshop on innovation hosted by the West Midlands Regional Observatory in Birmingham on 19 March 2009.
Copyright: What Creators and Users of Art Need to Know
Innovation in the service sector
1. Innovation in the service sector
Dr Palie Smart, Cranfield University
A presentation given at Innovation Day, 19th March 2009.
This presentation forms part of the Observatory’s ongoing
State of the Region dialogue between policy makers and
researchers on the theme of innovation.
3. Innovation
• Innovation driving UK economy
• 2003 Innovation Review
• Focus on manufacturers
• NESTA Hidden Innovation
• 2003 Innovation Nation
• Innovating in a recession
4. Defining Innovation
R
B ER
s, the first step
ea
“innovation is often confused with invention - but the latter is only
id
of
in a long process of bringing a good idea to widespread and effective use.”
on
Tidd et al (1997:24)
“invention refers to the development ta
tinew idea or an act of creation”
whereby, “innovation refers toplo
i of a
ex
the commercialising of the invention”
ul
Ahuja & Lampert (2001:522)
sf conception + technical invention + commercial
es
“ innovation = theoretical
cc
Su
exploitation Trott (1998:12)
“innovation is one percent inspiration and ninety-nine percent perspiration”
Norville Barnes “The Hudsucker Proxy”
5. Service innovation
What do we know already?
• Product centric innovation and manufacturing
• Product Service Systems (Product-service
bundles)
• Generic innovation management models
• Trends e.g. customisation
• Services are different
8. What are services?
• Service is a verb
• Primary offerings are intangibles: experience-based
products that can not be touched
• Services are something that can be bought and sold but
which you cannot drop on your foot
(Gummersson, 1987)
• Different types of services and wide range of sectors
10. Service augmentation
Storey and Eastwood, 1998
• Greater service provision
• For both product and services innovators
• Core good/service product
• Production and delivery of the service
• Servicescape
ambient conditions, spatial layouts, symbols
• Role of design
11. Servitization of
manufacturing
Augmentation
• Rolls Royce
• Earned more revenue from services operations
• Power by the hour
• Integrated Vehicle Health Management
(IVHM)
• Business model innovation
12. From closed to open
innovation
• Re-thinking idea
generation and
channels to market
• Harnessing external
idea, while leveraging
their in-house R&D
outside their current
operations PROFESSOR, UC BERKELEY
HAAS BUSINESS SCHOOL
• ‘Closed’ to ‘Open’
13. Open Innovation
P&G
• Connect & Develop (C&D)
• Head of External Innovation
• Discontinuity Boot Camp
• 50% of ideas for new products and
technologies must come from outside the
firm
• Communities of Practice
• Technology entrepreneurs
14. Open innovation
In services
• Manufacturing: supply side, co-development
• Services: demand side
• Multiple touch points
• Broad scope and potential
• Highly experiential
• User labs, on and off-line
• Experimentation, prototyping; BBC Backstage
15. Open Innovation with
Not for Profit
• M&S and Breakthrough Breast Cancer UK
• 2006 launch of a range of lingerie for those
who have had breast cancer surgery
• Developed with post-operative women
• Scope for social innovation
• Social legitimacy as acting innovation capital
20. Trends and Drivers
• Customisation in goods
• My car
• Customisation in services
• iPod
• Personal shopping
• Healthcare (self care)
• Fitness
• Personal banking / financing
22. Search for synergies
• What could Flymo learn from biotech sector
• What could Direct line Insurance learn from NHS
• Platform, generic technologies/know-how?
• LED lighting
• Stem cells
23. Challenges
• Designing services
• Link to science and technology base
• Technology
• Total immersion in user experience (laboratory)
• Social innovation
• Broaden scope for innovation dimensions
• Investing in the Innovation Nation
24. Contact details
Dr Palie Smart
Senior Lecturer in Strategic Innovation Management
Cranfield University
E palie.smart@cranfield.ac.uk
T +44 (0)1234 754757
Web www.cranfield.ac.uk
Brian MacAulay
Senior Intelligence Analyst
West Midlands Regional Observatory
E brian.macaulay@wmro.org
T +44 (0)121 202 3247
Web www.wmro.org
Blog http://wmro.wordpress.com