Towards a European Strategy in Support of Innovation in Services A review of key evidence and policy issues

This report focuses on service innovation and the conditions in which service innovation can be promoted in European policies. The authors want to reinforce the current plans towards a European strategy in Support of Innovation in Services -SEC(2007) 1059 - within the preparatory works for the forthcoming communication in services innovation (expected for fall 2008). This work has been prepared under the framework contract between the European Commission – DG Enterprise and Industry - and TNO for the Sectoral Innovation Watch. The goal of the report is to precise guidelines indicated by the Commission's policy-officers and, at the same time, looks for providing new information and policy advice based on new analysis. The below listed reports are not explicitly cited and summarized here but constitute the starting point of the analysis: •European Commission (2007) Towards a European strategy in support of innovation in services: challenges and key issues for future actions. Commission staff working document SEC(2007) 1059. •Van Cruysen, A. and Hollanders, H. (2007) Are specific policies needed to stimulate innovation in services? Workshop of DG Enterprise and Industry, 4 February 2008. •Arundel, A., Kanerva, M., van Cruysen, A and Hollanders, H. (2007) Innovation Statistics for the European Service Sectors. Final Report, Pro Inno Europe. •Oxera (2006) Innovation market failures and state aid: developing criteria. Enterprise papers No 17/2006. The report has four chapters. The first one deals with the concept and evidence on service innovation. The second chapter presents a foresight exercise on service innovation, while the third chapter investigates economic rationale behind a service innovation policy. Finally the fourth chapter discusses policy gaps and European value added for approaching and to better adopt a service innovation policy framework. The report has been prepared by a team of experts on services innovation located in Germany, France, The Netherlands and Spain, and coordinated by Professors Rubalcaba, Hipp and Gallouj.