er-led methods have problems, in that customers cannot perceive or articulate their needs accurately, will respond as something that has to be (social desirability bias), and will have trouble imagining and giving feedback about something of which they have no experience (Matthing, Sanden & Edvardsson, 2004). Similarly, for technology-based services, customers do not know what they can expect from the services based on new technologies with which they may be unfamiliar. Thus, for firms seeking to develop innovative services, what is important is to try to identify potential, rather than relying on expressed, needs.
Today, service innovation is just as important as product innovation. The ideation of service innovation, vis-à-vis product innovation, is user-oriented, rather than maker-oriented. Thus, capturing and understanding user context is key to being able to offer personalized and relevant services, and further identify new service opportunities. Therefore, a user-centric approach is needed in new service development, especially in the era of ubiquitous service. There exists a rich literature on how to incorporate customers into new service development, but most has focused only on their expressed needs, and failed to identify potential needs. The suggested approach is composed of three parts: first, constructing a potential needs dictionary, second, developing a service map, and finally, identifying new service opportunities.
In fact, some studies have highlighted that innovation concepts (e.g. innovation, R&D), employed in innovation surveys, may be comprehended differently according to the activity. These different perceptions could be explained by the diversity of the nature of activities, the varied level of intangibility of the products as well as the constitution of the knowledge creation flows. Moreover, some innovation aspects in services are difficult to be measured, like the R&D activities and other processes of knowledge creation. The differences of interpretation could lead to misunderstanding innovation in services (Tether, 2003); so, innovation in those activities should be analyzed taking into account also, the logic of the production process.
Several service innovation analyses have been carried out under this approach. One important work to be mentioned is Barras’ model based, fundamentally, on the technological trajectory in the innovation context. Barras (1986) observed that services followed an innovation path opposite to that of manufacturing activities. Consequently, he concluded that service innovations are characterized by a reverse product cycle (RPC). The RPC consists of three stages: (1) improved efficiency phase, which means an investment in new technology to increase the efficiency of delivery of existing services; (2) improved quality phase, in which technology is used to improve the quality of services; and, ending the cycle, the stage (3) new products phase, which consists, basically, of the generation of new services (Barras, 1986).
R&D activities are an important way to create internal knowledge creation; not only for manufacturing but also for service industries, particularly for some of them. This is more evident after widening the R&D concept in order to include as R&D some creative works devoted to generating new knowledge and innovation. Actually, intra-sectoral analyses reveal that the intensity of R&D activities is higher in certain service industries than in some manufacturing industries. (Diversity of innovation patterns in services)
Service innovation requires new business models in which the business logic is aligned with the services provided. The concept of business model is about shaping the relation between an
