Innovation as a loosely coupled system in services

In this article we will put forward a model of the innovation system in services. The model is theoretical, but based on a review of most existing empirical research on innovation in services, including a recent EU financed project, called the SI4S project (Hauknes 1996, Sundbo and Gallouj 1998), which we have participated in, and which has been the occasion for us to develop these thoughts 1 . We find that the empirical results give us a basis for establishing a general model and that it is a fair generalisation of these results. Even if the service industries are different from on another, the empirical research indicates that there are some common characteristics of the innovation processes due to the specific nature of service production that is common to all service industries. The main focus of the model is the innovation processes from the perspective of the the service sector: How do service industries view their innovation activity? What are the driving forces behind the single service enterprise ? More generally, how do these driving forces combine to constitute a system ? And how should we characterise this possible system ? This article is divided in five sections. The first section (section 2) is devoted to an attempt to present some general characteristics of services and of service innovations. On the basis of empirical work, section 3 presents some typical innovation patterns in services. This presentation leads us to what we mean by innovation system and whether an innovation system may exist in services discuss in section 4. In section 5 we conclude about the issue of innovation system and discuss how the analysis might contribute to developing evolutionary theory.