Our economic (and casual) view of the world is very product-centric. We feel comfortable with tangible things. And have built up ways of thinking and acting (a logic) around the value of (tangible) goods and that we exchange value by exchanging goods. We see that the manufacturing process is where value is added – raw goods are less valuable than something they are manufactured into.
Yet, our economies are around 80% built on service. And this is growing.
In this article journey, we observe there are four main causes behind the shift to service economies – economic, user behaviour, asset usage and value of data.
We look at what service is through many definitions. We find that classically we define service as a poor relative to goods. Noting that they are intangible, inconsistent, inseparable, can’t build an inventory, and need involvement. However, we further find that these attributes are actually good attributes. Inventory is expensive, inconsistent means configurable etc.
Next we uncover a more formal way of describing a service – as a set of characteristics. Once we have that, we can then understand what service innovation is – improvements to those characteristics.
Finally we introduce den Hertog’s 4-dimension model that we can use for searching for service innovations. We enhance it to reflect the modern world that is technology and data forward. And we see how we can use the concepts in that model to manage a service innovation portfolio. As well as understand our ability to implement service innovations (and where we could improve).