Tekes’s role in Fostering Innovation in Services RESER Tiina Tanninen-Ahonen Director, Service Innovation Tekes

Serve 1.Services in Tekes’s strategy 2.Serve – Innovative Services – program 2006 – Innovation Policy in Services, Innonet – project IPPS Tekes’s role in Fostering Innovation in Services

Serve Conclusions from the Service and Innovation Conference Helsinki October 2006 Broad-based innovation policy (Finland's key theme during the EU Presidency ) attention not just to supply side policies but also to consumers, customers and markets as important factors of innovation. Services play dominant role in economies but less so in innovation policies is a strong need for new policy initiatives and mutual learning in innovation policy planning and design that ackowledges services. Division between services and manufacturing is increasingly artificial: policies need also to reflect the merger between services and manufacturing and, especially, recognise that services are becoming a key ingredient to manufacturing companies' competitiveness. A set of policies affect innovation in services there is a need to take a comprehensive look at all the policies that affect innovation in services and reassess their focus from the viewpoint of services and the related innovation. Background for the service innovation policy development

Serve Tekes’ mission statement Tekes boosts the development of Finnish industry and the service sector by technological means and through innovation. This will renew the economy and increase added-value, productivity and exports, thereby creating employment and enhancing well-being. DM Copyright © Tekes Finnish Funding Agency for Technology and Innovation

Serve Tekes strategy 2005, innovative services as catalysts for modernization Modernization of industries by service-driven business concepts Manufacturing and construction, 30 % of GDP Service sector, 70 % of GDP Knowledge Intensive Business Services and Activities KIBS - KISA Reforming service markets PrivatePublic Innovative service concepts Developing new service concepts Developing new business models based on service innovations DM 2409i Copyright © Tekes

Serve Serve – Innovative services Programme duration: Programme volume: approx. 100 million euros, of which Tekes funding is 50 per cent Further information: DM 2409i Copyright © Tekes Focuses upon developing new service concepts and service business based on these concepts.

Serve Focus areas Knowledge intensive business services (KIBS, e.g. software design, consulting, research and development, legal services, corporate finance and business administration, marketing, advertising, engineering) Trade Real Estate Services Industrial services Financing and insurance Logistics Asset Management Services The main emphasis is on B to B services  personal & social/welfare services are excluded from the programme. DM 2409i Copyright © Tekes

Serve Research themes in 2007 In 2007 Serve technology programme funds research projects which relate to the following topics service management and leadership, (management of services) the role of customers in service development and production internationalization of services. The research funding budget for 2007 was 4,2 million euros. 7 new projects were funded in 2007 in addition to 22 existing projects

Serve The Aims and Means of the Roadmap Work Identifying the key challenges in Finnish service business companies Today In the near future Identifying the State of the Art in Finnish academic research in services Semi-structured interviews and on-line survey 28 companies in trade, KIBS, RE, manufacturing and logistics interviewed 12 researchers interviewed A survey was sent to 52 researchers

Serve Main findings Overall the identified challenges are similar from one industry to another The main challenges are related to The role of customer in service business and service innovation process Service Business Management and Leadership Development of new service concepts

Serve The role of a customer in service business and service innovation process Understanding customer needs and turning them into profitable business How to create value to your customer? How to collect and use customer data more efficiently? How to anticipate customer needs? Customer as a development partner How to identify strategic, right customers as development partners? How to make more use of everyday development at the customer interface? When & what to develop with customers?

Serve Service Business Management and Leadership Creating a service mindset in your organisation and among your customers Willingness and capability to sell services Willingness and capability to use and buy services Pricing models & profitable business models How to define the value of your service to your customer? How to build a profitable service business? Rid off giving out services as “favours”  Towards making money out of them

Serve Developing new service concepts Mechanisms for developing new services How does a service development project differ from the traditional product development? How to identify the customer needs for new services? How to turn new and challenging ideas into practice? Scalability of service concepts How to make your service business up-scale? How to find the optimal between scalability and customization?

Serve Ultimate aim of the IPPS A preparatory act for an INNO-Net that aims at joint activities at trans-national level Focus is in service innovation related programmes and activities The ultimate aim is to develop a common roadmap that will lead to Better knowledge of the possibility to prepare joint activities at trans-national level (e.g. INNO-Net) Better knowledge of possible barriers Better knowledge of suitable and eligible partners for trans-national cooperation IPPS – Innovation Policy Project in Services FP6 / Research and Innovation Programme INNO-Net / Specific Support Action (SSA)

Serve Mapping study contributors

Serve IPPS Conclusions (1/2) Due to the early development phase of the service related innovation policy and programmes, there is also a clear need to continue the exchange of information and best practices between Member States Because of the early stage of development spontaneous solutions are not likely to emerge There is a need for broad-based transnational collaboration activities in the field of service innovation This kind of broad-based approach was regarded necessary by the Expert Focus Group because of the importance of the subject and multifaceted nature of the service innovation

Serve Such a broad-based approach would include strategic, policy and operational level activities to exchange ideas, information and best practices between Member States and regions and therefore accelerate the learning process in the identified field, to create common language and understanding in the area of service innovation, to encourage the development of necessary policy toolboxes and measures in the identified field and to start a mind-set change that is required in order to recognise services as a powerful economic force in the contemporary and future European Union. A long-term goal should be to achieve an effective and balanced innovation policy which would be industry neutral in nature There is also a need for a more balanced mix of innovation policy utilising both demand- and supply-side measures in the promotion of service innovations IPPS Conclusions (2/2)