Elaborating the characteristics-based approach to service innovation: Making the service process visible

Faïz Gallouj, Marja Toivonen

Research output: Contribution to journalArticleScientificpeer-review


Studies on services are today accumulating rapidly, their focus varying from the issues of the service economy to the features of service sectors and service firms, and further to the nature of service products. An important topic which has aroused growing interest during the last decade is innovation in services. Here, we can identify three basic approaches (Gallouj, 1998, 2002; Gallouj, Savona, 2009). The earliest studies adopted a technologist or assimilation approach, which reduces innovation in services to the introduction of technical systems and focuses on technological cycles and technological trajectories (Barras, 1986; Soete, Miozzo, 1990). As a reaction to this technology- and manufacturing-biased a view, there emerged a service-oriented or differentiation approach, which highlights that innovation in services often follows service-specific trajectories instead of technological ones (e.g. Gallouj, 1991; Preissl, 2000; Sundbo, 1998). The third approach, which is now increasingly gaining ground, is the synthesis or integrative approach, which seeks a common framework for the analysis of innovation in both goods and services without denying, however, the existence of some differences between them (Bröchner, 2006; Gallouj, Weinstein, 1997; Gallouj, 2002; Sundbo, 2001; de Vries, 2006; Windrum, Garcia-Goni, 2008).

This paper aims to contribute to the further development of the synthesis approach. We argue that goods and services can be analysed using a common conceptual framework, but highlighting within this framework the process nature of services. The conceptual framework that we elaborate in this paper is the characteristics-based model developed by Gallouj and Weinstein (1997), following Saviotti and Metcalfe (1984). In such a model the product (whether it is a good or a service) is the conjunction of vectors of characteristics and of competences: service characteristics [Y], technical characteristics [X], provider competences [C] and client competences [C’]. Our hypothesis is that the process dimension is not visible in this model which is likely to reduce its operational validity. The purpose of this paper is therefore to improve the characteristic-based approach and to make the service process more visible.

We first analyse the content of the different characteristics categories in the original Gallouj-Weinstein model and summarise the innovation types recognised on the basis of the model. Thereafter we describe the results of the applications of the model from the theoretical viewpoint and consider the modifications and extensions made in the literature. Then we present our suggestion for a supplemented version of the model. In the fourth part of the paper, we apply the supplemented model in two empirical cases: 1) ‘workplace design’ provided by architect’s offices and 2) ‘fifty plus’ services provided by insurance companies. We have studied the cases in depth at the company level in Finland, but both of them reflect service innovations that have spread internationally and thus applicable widely.
Original languageEnglish
Pages (from-to)33-58
JournalJournal of Innovation Economics & Management
Issue number8
Publication statusPublished - 2011
MoE publication typeA1 Journal article-refereed


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