Service innovation challenges at the policy, industry, and firm level: A qualitative enquiry into the service innovation system

This report documents the results of an exploratory inquiry into the challenges of service innovation in Norway. It is based on 45 interviews conducted with 63 representatives of the Norwegian innovation system for service innovation reflecting the views of representatives from knowledge intensive service providers, regular service providers, capital market institutions, innovation policy system institutions and research institutions.

The report first briefly reviews the challenges expected to be found when using theoretical and empirical studies of service innovation as it is reflected in the research literature. Next, it reports the methodology applied to capture the opinions of the innovation system representatives. Finally, it reports the results at three different levels; the policy level reflecting challenges in innovation policy, regulatory policy and general political decision making affecting service innovation; the industry level reflecting cross sectoral challenges at the industry level, and finally, and most importantly in this report; the business level which covers both the firm and value network levels.

Our findings are organized by a framework focusing antecedents, processes, methodologies, types and effects of service innovation. We conclude that the challenges we find at the business level are rather complex and differ somewhat from what was expected from theory and considerably from those derived by market and systemic failure approaches to innovation. We conclude that the challenges at the business level should be approached with an interaction perspective on the dynamic parts of the service innovation system covering knowledge intensive service providers, capital market institutions and traditional service providers. A traditional approach to research driven innovation where the source of the innovation is found in research institutions and where innovation is stimulated through traditional innovation policy instruments does not seem to be equally appropriate in service innovation.