How To Innovate InService-Based

Businesses

What Are Services?Primary Industry

(Primary = Extractive. E.g. Farming, forestry, mining, energy, etc.)

Secondary Industry(E.g. manufacturing, construction, and utilities)

Services Industry(Services = transform material, organisms or data)

Example Services• Air & space transport• Land transport• Water transport• Motor vehicle services• Ancillary transport services• Defense & security• Sewage & sanitary services• Wholesale distribution• Retail distribution• Rental services• Real estate services• Health & social work

• Hotels & restaurants• Recreational services• Education• Public administration • Membership organizations• Insurance & pension funds• Financial intermediation• Auxiliary financial services• Research & development• Business & advisory services• Post & telecommunications• Computer services

= Sydney’s leading innovation experts

• Intangible– Instead of a material product, a service involves

transformation of material, or a person or data

• Interactive / customer-intensive– Often requires presence & participation of the client

• Co-terminal– Service production, process & consumption take

place at the same time & place

• Low portability– Often difficult to store or transport a service

How Do I Spot A Service?

How Do I Spot A Service?• Information-intensive

– Often include communication flows between supplier & customer

• Knowledge-intensive– Often requires high-skilled workers

• Tailored to customer or segment– Often highly tailored to the customer or service

situation vs. being mass-produced

– Tend to focus on one of these customer types: Business, consumer or public

= Help implementing innovation programs in Sydney

Dimensions of Service Innovation

Innovate the:

• Service Concept or Value Proposition

• Client interface – E.g. co-creation, high-touch or self-service

• Service delivery system – electronic, transport, packaging, etc

• Marketing strategy

• Organizational structure

• Technology innovation

Services vs. Manufacturing

• Services business innovation teams are:– Less likely to have large budgets

– Less likely to use patents

–More likely to use trademarks

– Less likely to use suppliers or customers as sources of information for innovation

5 Service Innovation Patterns1. Internal processes without a specific project: Innovations emerge in an unintentional, unplanned and incremental way.

2. Internal innovation projects: Deliberate, project-based innovation; usually focused on improvement of the service production system.

3. Innovation projects with a pilot customer: The customer supplies resources, sponsorship, critical evaluation and information.

4. Innovation projects tailored for a customer: The client presents a specific problem and the service provider seeks a solution

5. Externally funded innovation projects: Usually formal and research-oriented; involving many collaborators; intended to generate new service concepts or platforms to benefit a whole sector.

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Sydney Business?

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