Article: ”Towards a theory of innovation in services” -Barras Service Innovation and New Service Development Olavi Kujanen

content  Goal of the article  Introduction of the articles main themes and arguments  Conclusion of the article  Opinion of the article  Topics for discussion

Goal of the article  Set a foundation for theory of innovation in service  Introduce the reverse product cycle process for services innovations  Combine the theory with economic cycles

Stantard product cycle theory 1.Introduction2.Growth3.Maturity Introduction phase -Major product innovation -rapid technical advance -new industries and products -high cost, but edge in performance Growth -focus on quality of the product -bigger volumes but fewer products -new markets Maturity -automation and large manufacturing units -incremental improvements on unit costs

Transmission of technology  Transmission of a major new technology  From capital goods to user sectors  Occurs slowly  Two types of delays  -price versus performance  -risk and uncertainty  -technical feasibility

reverse product cycle process for service innovations Applications of new technology Quality New services Applications of new technology -Effiency of delivery -incremental -cost effient services Quality -better services -radical New Service -new service products to the industry -opening of new markets

Innovations and economical growth cycle  Economical growth and product cycle: Prosperity – transition - emergent Recession – introduction - new Depression – growth - improved Recovery – maturity - cheaper  Economical growth and reverse product cycle: Prosperity – growth – improved Recession – maturity - cheaper Depression – transition - emergent Recovery – introduction - new

Conclusion of the article  Theory based on product innovation model  justification from case studies of IT sector only  Intertwined with technological innovations  Combined with economical cycles  Cycles last decades not years

Opinions about the article  Product vs service process  Problem of non-technology driven service innovations  valid at technology driven service field

Discussion  Do you think reverse product cycle could be used in other fields of service other than IT?  Which is the models biggest weakness?  Please be free to ask anything