ServPPIN: a review of scientific findings

ServPPIN is a research project which focuses on the role of public and private services on growth and welfare and the particular role of public-private innovation networks (PPIN). Public-private innovation networks are considered to be an organisational platform in which public and private services can perform complementarities and synergies in many ways. The project analyses public and private services, and their impact on growth and welfare. In particular it focuses on service innovation and on public-private services, and their impact on growth and welfare. Specifically, the main objectives of ServPPIN are: •To identify the linkages between services, economic and social growth, understanding the contribution of service innovations in the current economy and society and any differences that may exist between the public and private sectors. •To understand how public-private sector interactions function, and how they can be better managed by private and public sector policy-makers to increase performance and welfare. •To understand the characteristics of public-private service networks that induces innovation, growth, employment and welfare. ServPPIN has undertaken new theoretical and empirical fieldwork involving cross-country and cross-sector empirical analysis. New techniques are applied for impact analysis: both public and private services, comparing impacts on performance (productivity, competitiveness) with impacts on welfare (e.g., employment, service quality, ‘universal' access to services). The project has been organised around nine working packages (WP). In order to define the service innovation and service public-private innovation networks (ServPPINs) concept, and to guide the interface between theory and empirical research, the project has developed an analytical framework for studying multi-institutional networks. The empirical research has followed a three-pronged approach: •A large-scale statistical analysis of public and private services in growth and welfare at the macroeconomic level. •A statistical analysis of the contributions ServPPINs to performance, growth and welfare at the meso and sectoral level. •Case studies covering major services types: health, transport and tourism and knowledge intensive services. The project has produced new knowledge and European added value through: •Knowledge creation on the service economy: growth factors, facilitators and impacts on productivity, employment, socioeconomic changes, and welfare. •New approach to service innovation from a multi-agent framework perspective. •Understanding of public-private interactions through the case of networks and related dynamics including the use of life cycle theory. •Drawing of functional and effective policy lines. ServPPIN tackles the key developments and impacts of public-private services provision and of public-private innovation networks (PPINs) at three levels of analysis: macro, meso and micro. At macro level the main outcomes of the project are related to new service developments, service innovation and the contribution to growth and welfare. The project studies the stylized facts on public, private and mixed services; their similarities and dissimilarities across the enlarged EU; the challenges of the EU service economy; the explanatory factors of services growth and assesses the performance and efficiency of services. At present, the ever-increasing and dynamic role of services in modern societies has led to increasing levels of interaction between public and private services and to the development of mixed forms. Moreover, across the enlarged EU, the dominant trend is towards the increasing participation of private services in total employment, although a diverse macro and meso mapping of service economies in close correlation with social and institutional models can also be found. Furthermore, the variety of service economies in the EU can be explained on the basis of the different roles played by factors such as the state, social changes, labour market institutions and previous developments in the evolution of public, private and mixed services. ServPPIN has also proven that although private and public services have made significant contributions to aggregated growth in the EU in recent years, their impacts should also be assessed on the basis of a multidimensional approach which takes into account outcomes and quality aspects. In addition, the project addresses the different dimensions of public and private service innovation and examines the impacts of innovation on productivity, growth and employment. Services, particularly the knowledge-based ones, are very active in terms of innovation in all developed countries. Besides technological innovations, non-technological or intangible forms of innovations play an important role in services despite not being comprehensively captured by statistics yet. Along with the problems related to the measurement of innovation, lies another one concerning performance. Thus, an innovation and a performance ‘gap' are identified in contemporary advanced service economies. ServPPIN aligns with the integrative perpective of innovation in services, also studying service innovation specificities in the field of public services. Public and private innovation networks can be partly related to the ‘open innovation' models and social innovation models which have the particularities of being cooperative and interactive. At meso level the main outcomes relate to theory developments under multi-institutional frameworks, the concept of innovation network life cycle and the study of the role played by evolutionary inefficiencies in the networks. The application of social network analysis allows acknowledging for the heterogeneity of actors in the network and their different roles. From this focus on networks, we derive a new rational of innovation policy that can be summarized under ‘avoiding evolutionary inefficiencies'. This approach seeks to avoid situations which hamper the economic development. Such network inefficiencies concern the amount of existing links among the relevant actors, the size of the network, its structure, and the different roles that the individual actors play within the network. In this perspective, the structures and dynamics of innovation networks become the focus of attention as well as the starting point of action in innovation policy. At micro level, ServPPIN followed a case study approach. In 2008/2009, the project teams carried out 40 case studies in seven different countries in the following sectors: transport; health services and in knowledge-intensive services and tourism. Case studies provide a micro-perspective on the emergence of innovation networks over their life cycle and give insight as regards drivers, actor configurations, impacts and critical events of their evolution over time. The key role played by the third sector and entrepreneurship in many PPINs is stressed which is also closely connected with rising social innovation. Results have shown the importance of cooperation and interaction in innovative service networking between public and private agents -and civil third sector, allowing exploiting potential complementarities and synergies in areas such as credibility, dissemination, speeding up the process of agenda setting and decision making, more comprehensive view of the problems, legitimacy, resources, efficiency, flexibility, public research more efficient, learning capacity and knowledge transfer. ServPPINs are mainly organizational networks, often small, professional and goal oriented that can be partly considered social innovation in some cases, but they cannot be considered as social networks in full. The success of service innovation networks can derived from four main interrelated sources: a. The role of promoters and drivers -both internal and external- of ServPPINs is essential. Success factors require the definition and implementation of a joint business case, trust -fundamental in many of the case studies analyzed-, a good entrepreneurial fit, flexible structures, use of inputs from benchmarking exercises, and pro-innovation enterpreneurship and culture. Finance also play a role as well as the establishment of the right strategy between bottom-up or top-bottom set up that may vary depending on the particular service innovation to be developed and the institutional context. b.The integration of a particular individual innovation network within systemic and social network, what can be reflected in the role of the role of third sector, the integration in local community, and the different facilitators from institutions such as universities or public and policy administrations and, in general, society through social innovation networks. The muti-agent framework for service innovation has been tested and can be considered as a appropriate platform where different agents and interact to make a network innovative and successful. To some extent, successful ServPPINs can be considered the outcome of successful social innovation crystallized in a the small, professional and goal-oriented nature of most of them c.The overcoming of barriers to ServPPINs in areas such as the rigidity of public administrations, the mistrust and expectations mismatch, the existence of different interests and incentive systems, the problem of free riders and asymmetric information, networking competences and, in some cases, mainly knowledge-oriented services, appropriability problems. d.The reduction of evolutionary inefficiencies in the lice cycles of Servppin where networks are not efficient enough to adapt to the changing phases of their life and the different external and internal elements that can drastically affect their development, their expected functioning and impact and even their own nature and composition. At policy level three broad objectives of possible policy intervention are identified to overcome market and systemic failures, reduce evolutionary inefficiencies and increase the contribution of ServPPINs to growth and welfare: •Strengthening service-specific innovation and innovation capabilities of firms, users and other agents involved in innovation •Facilitating co-operation and networks involving service and social innovation •Empowering the public sector and the third sector for co-operation: role of civil society Moreover, the promotion of ServPPINs may be based on the enhancement and application of a full range of policies such as: R&D policies, innovation policies, public procurement, standards, regional policies, employment & skills, internal market, competition, health, transport, tourism, etc. In this sense, service-oriented innovation policy is not necessarily aimed at specific individual's service sector: in contrast, it can be seen as a predominantly horizontal policy, going across sectors, based on service innovation being considered as a systemic dimension useful for any kind of economic activity, thus, encouraging the development of public-private innovative networks.