Advancing Services Innovation

Five Key Concepts
Part of the Service Science: Research and Innovations in the Service Economy book series (SSRI)


As the many chapters in this volume agree, there is growing awareness of the importance of services innovation to the prosperity of advanced economies in the 21st century. In this chapter, we explore the challenges that services innovation poses, as well as the potential value it may create. The conceptual differences between products and services are also outlined. We pay particular attention to five key concepts in systems integration: the role of complexity; the role of dynamics; the role of systems integration; the role of openness; and the structure of organizations.


Tacit Knowledge Product Life Cycle Service Business Service Innovation Physical Product 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Abernathy, W.J. and Utterback, J.M. (1978). Patterns of Industrial Innovation, Technology Review, Vol. 80, No. 7, 40-47.Google Scholar
  2. Baldwin, C.Y. and Clark, K.B. (2000). Design Rules: The Power of Modularity, The MIT Press: Cambridge, Mass.Google Scholar
  3. Barras, R. (1986). Towards a theory of innovation in services’, Research Policy, 15, 161-173.CrossRefGoogle Scholar
  4. Basole, R.C. and Rouse, W.B. (2008). Complexity of service value networks: Conceptualization and empirical investigation. IBM Systems Journal 47(1).Google Scholar
  5. Bessant, J. and Davies, A. (2007). Managing Service Innovation, DTI Occasional Paper, No. 9, Innovation in Services, 65-94.Google Scholar
  6. Brusoni, S., Prencipe, A., and Pavitt, K. (2001). Knowledge specialization and the boundaries of the firm: why do firms know more than they make?, Administrative Science Quarterly, Vol. 46, 597-621.CrossRefGoogle Scholar
  7. Chesbrough, H. (2005). Toward a science of services. Harvard Business Review, 83, 16-17.Google Scholar
  8. Chesbrough, H. and Spohrer, J. (2006). A research manifesto for services science. Communications of the ACM. 49(7). July. 35-40.CrossRefGoogle Scholar
  9. Chesbrough, H.W. (2003). Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, Boston, Mass.Google Scholar
  10. Chesbrough, H.W. (2006). Open Business Models: How to Thrive in the New Innovation Landscape, Harvard Business School Press, Boston, Mass.Google Scholar
  11. Chesbrough and Kusunoki (2001). The Modularity Trap: Innovation, Technology Phase-Shifts and the Resulting Limits of Virtual Organizations, in Ikujiro Nonaka and David Teece, Managing Industrial Knowledge, Sage Publications, 2001Google Scholar
  12. Cusumano, M.A. and Gawer, A. (2002). The elements of platform leadership, MIT Sloan Management Review, Spring 2002, 51-58.Google Scholar
  13. Cusumano, M. and Suarez, F.F. (2007) Product, Process, and Service: A New Industry Lifecycle Model,
  14. Davies, A. (2004) Moving base into high-value integrated solutions: a value stream approach, Industrial and Corporate Change, Vol. 13, No. 5, 727-756.CrossRefGoogle Scholar
  15. Davies, A., Brady, T. and Hobday, M. (2006). Charting a path toward integrated solutions, MIT Sloan Management Review, Spring 2006, 39-48.Google Scholar
  16. Davies, A., Brady, T. and Hobday, M. (2007). ‘Organizing for solutions: systems seller vs systems integrator’, Industrial Marketing Management, Special Issue ‘Project marketing and marketing solutions’, 36: 183-193.CrossRefGoogle Scholar
  17. Drucker, P. (1991). The New Productivity Challenge. Harvard Business Review, November-December 1991 69-79.Google Scholar
  18. Galbraith , J. R. (2002a) Organizing to Deliver Solutions. Organizational Dynamics, 31/2, 194-207.CrossRefGoogle Scholar
  19. Galbraith , J. R. (2002b). Designing Organizations: An Executive Guide to Strategy, Structure, and Process, San Francisco: Jossey-Bass, Wiley.Google Scholar
  20. Gawer, A. and M. A. Cusumano (2002). Platform Leadership: How Intel, Microsoft and Cisco Drive Industry Innovation, Boston: Harvard Business School Press.Google Scholar
  21. Gerstner, L. V. (2002). Who Said Elephants Can’t Dance? Inside IBM’s Historic Turnaround. London: Harper Collins Publishers.Google Scholar
  22. Hanniford, W.J. (1976). ‘Systems selling: problems and benefits for buyers and sellers’, Industrial Marketing Management, (5), 139-145.Google Scholar
  23. Hax, A. C. and Wilde, D. L. (1999). The Delta Model: Adaptive Management for a Changing World. Sloan Management Review, Winter: 11-28.Google Scholar
  24. Hayes, R.H., and Wheelwright, S.C. (1984). Restoring our Competitive Edge: Competing through Manufacturing, John Wiley & Sons: New York.Google Scholar
  25. Heskett, J. L., Jones, T. O., Loveman, G. O., Sasser, W. E., Schlesinger, L. A. (1994). Putting the service profit chain to work. Harvard Business Review, 72, 164 – 174.Google Scholar
  26. Hobday, M., Prencipe, A. and Davies, A. (2003). ‘Introduction’ , in A. Prencipe, A. Davies and M. Hobday (eds.), The Business of Systems Integration , Oxford: Oxford University Press, 1-12.Google Scholar
  27. Hobday, M., Davies, A. and Prencipe, A. (2005). Systems Integration: A Core Capability of the Modern Corporation, Industrial and Corporate Change, Vol. 14, 1109-1143.CrossRefGoogle Scholar
  28. Horn P. (2005) “The New Discipline of Services Science". BusinessWeek, January 21, 2005.Google Scholar
  29. IfM and IBM (2007). Succeeding through Service Innovation: A Discussion Paper. Cambridge, United Kingdom: University of Cambridge Institute for Manufacturing. ISBN: 978-1-902546-59-8.Google Scholar
  30. Lampel, J., and Mintzberg, H. (1996). ‘Customizing Customization’, Sloan Management Review, Vol. 38, No. 1, 21-30.Google Scholar
  31. Levitt, T. (1976). The Industrialization of Service, Harvard Business Review, Vol. 54, No. 5, 63-74.Google Scholar
  32. Levitt, T. (1983). ‘After the sale is over…’ Harvard Business Review 61 87-93.Google Scholar
  33. Lusch, R.F., Vargo S.L., and Wessels, G. (2008). Toward a conceptual foundation for service science: Contributions from service-dominant logic. IBM Systems Journal: Service Science, Management, and Engineering , 47(1), 5-14.CrossRefGoogle Scholar
  34. Marsh, P. (2007) Back on a roll in the bearings business, Financial Times, 6 February 2007.Google Scholar
  35. Mattson. L-G. (1973) Systems selling as a strategy on industrial markets, Industrial Marketing Management, Vol. 3: 107-120.CrossRefGoogle Scholar
  36. Normann, R. (2001). Reframing Business: When the Map Changes the Landscape. Wiley, Chichester, New SussexGoogle Scholar
  37. Normann, R. & Ramirez, R. (1993). From value chain to value constellation: Designing interactive strategy. Harvard Business Review, 71, 65 – 77.Google Scholar
  38. Quinn, J. B., Baruch, J. J., and Paquette, P.C. (1987). Technology in Services. Scientific American. 257(2). December.Google Scholar
  39. Quinn, J. B. (1992). Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry. New York: The Free Press.Google Scholar
  40. Pine, II, B.J., & Gilmore, J.H. (1999). The Experience Economy: Work is Theatre & Every Business a Stage, Boston, MA: Harvard Business School Press.Google Scholar
  41. Prahalad, C. K. and Ramaswamy, V. (2000). ‘Co-opting Customer Competence’. Harvard Business Review, January-February: 79-87.Google Scholar
  42. Prencipe, A., Davies, A. and Hobday, M. (2003). (ed.) The Business of Systems Integration, (2003). Oxford: Oxford University Press.Google Scholar
  43. Schmenner, R. W. (1986). How Can Services Businesses Survive and Prosper?. Sloan Management Review, Spring 1986, 27 (3) 21-32.Google Scholar
  44. Slywotzky, A. J. (1996). Value Migration: How to Think Several Moves Ahead of the Competition. Boston, MA: Harvard Business School Press.Google Scholar
  45. Slywotzky, A. and Morrison, D. J. (1998). The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow’s Profits. Chichester: John Wiley & Sons.Google Scholar
  46. Utterback, J.M. (1994). Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change, Harvard Business School Press: Boston, Mass.Google Scholar
  47. Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1 – 17.CrossRefGoogle Scholar
  48. Voss, C.A. (2003). Rethinking paradigms of service – service in a virtual Environment, International Journal of Operations and Production Management, Vol. 23, No. 1, 88-104.CrossRefGoogle Scholar
  49. Wise, R. and Baumgartner, P. (1999). Go Downstream: The New Profit Imperative in Manufacturing. Harvard Business Review, September-October: 133-41.Google Scholar
  50. Womack, J. P. and Jones, D. T. (2005). Lean Solutions: How Companies and Customers Can Create Value and Wealth Together. Free Press. New York, NY.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Haas School of BusinessUC BerkeleyBerkeleyUSA
  2. 2.Innovation and Entrepreneurship GroupImperial College Business School, Imperial College LondonLondonUK

Personalised recommendations