The article discusses two issues. The first is whether service firms innovate at all; the second is how they organise the innovation activities. The basis forthe analysis is a series of case studies in Danish service firms. The first issue is discussed theoretically. Of the several paradigms within traditional innovation theory, the strategic innovation paradigm is the most adequate to explain service innovations. Organisational learning must be separated from innovation whereby the latter means a jump in tumover and profit while the first means a lower and continuous growth. The empirical analysis demonstrates that the service firms innovate.The second issue is analysed empirically.Different ways of organising the innovation activities are set placed a taxonomy. It is concluded that the service firms rarely have R&D departments and innovation generally is an unsystematic search-and-learnprocess.
From Journal (he Services Industry Journal Vol.17, No.3 (July 1997), pp.432-455), published on 31-07-1997
Original document URL: http://people.ischool.berkeley.edu/~glushko/ISE-Notes-Fall2006/Sundbo-ServicesInnovation.pdf