Since the late 1990’s, service innovation has gained considerable attention. There are several reasons for this. Nearly all of the European employment growth between 1995 and 2007 has been due to growth in services.

In western countries, service represents more than 70% of the value creation and more than 80% of the employment. Knowledge intensive business services (KIBS) are believed to be drivers of innovation in many sectors. Due to ICT and new forms of organization, international service trade is growing and is expected to grow even more in coming years. Despite this, most of the literature about innovation is based on studies of experiences from innovation in manufacturing industries.

CSI Background

Despite the positive characteristics of services and service innovation, significant challenges still exist at the regulatory, industry and firm level (company and network levels). At the regulatory level, it is difficult to design policy measures, partly because the service sector is a heterogeneous collection of industries and partly because more and more manufacturing industries also engage in service activities. The sources of market and system failures of are not well understood. At the industry level, we lack the statistical studies that properly describe service innovation. Theories, models, and concepts from innovation in manufacturing industries have been applied to services.

We now know that service-sector innovation is different from innovation in goods producing industry, and we know that we need to increase our commitment to research in order to better understand the benefits of service innovation. To understand and stimulate knowledge in service provision will be a decisive factor for economic growth in the future. At the firm level, service innovation is often customer- driven, and customer involvement is important; but intangibility makes this more difficult. Service innovation effects are more often qualitative and, therefore, difficult to measure.

Based on these findings, The Center for service innovation (CSI) is focusing on four innovation challenges which also represent considerable opportunities for service-driven value creation. These innovation challenges are CSI’s main research themes and will be introduced under 'research'.