CTF BLOG: How Platforms Foster Service Innovation2020-02-05
Businesses need service innovations to survive and strengthen their competitive advantage. By explaining how firms and key actors (such as entrepreneurs) manage to remain innovative, our research explains why innovation platforms are central.
Empirical observations show that key actors or entrepreneurs often drives change in service ecosystems and the development of innovation platforms. Examples of this include: Tesla’s Elon Musk, Steve Jobs at Apple and Jeff Bezos at Amazon, as well as Oscar Farinetti (Eataly), Xavier López Ancona (KidZania) and Ole Kirk Christiansen (LEGO). The innovation platform’s most important function is to enable key actors to orchestrate collaboration among multiple actors using technologies and a wide range of resources, configure to foster service innovations. By facilitating access to and use of appropriate resources, an innovation platform enhances the efficiency and effectiveness of service exchange and so becomes a venue for innovation.
Service innovation research has extended the study of service ecosystems to the role of platforms to foster service innovations, thus creating a sustainable advantage in competitive markets. Making creative and effective use of these innovation platforms requires a better understanding of how key actors foster service innovation by engaging with multiple actors, understanding dynamic structures and managing the innovation process. This research on innovation platforms explains how firms configure and exploit innovation platforms to foster service innovations.
A framework containing innovation activities and innovation space is developed in this paper, linking the innovation platform to the service platform. Constituted by shared structures, including norms, standards, and rules, together with value co-creation logics, the service platform functions as the institutionalized site of resource integration and value co-creation processes. The usefulness of this framework is shown by describing how six firms use three categories of a platform to pursue innovation.
An innovation platform builds on existing resources and collaboration with engaged actors to accomplish, coordinate and facilitate the realization of innovative value propositions for business renewal. Our six case firms – see table - reveal a core focus sustained over time and used as a foundation for other platforms and service innovations.
The six studied firms have all continued to innovate over time—in some cases, over many decades. Driven by the key actor, an innovation platform facilitates this continuous development and must, therefore, be sufficiently flexible to cope with changes in market conditions and context. This includes recruiting and retaining new actors, absorbing context dynamics and exploiting new ideas technologies, brands and other resources over time. These facilitate analysis of changes in the contextual elements of space, resources and institutional arrangements and how these can foster service innovation. The wide range of activities and interactions with a growing number of actors that must be coordinated, controlled and directed in a changing context seems to have been successfully accommodated by the platforms in question.
Edvardsson, B., Tronvoll, B. (2019). How Platforms foster Service Innovation. Organization Dynamics. Forthcoming.
Tronvoll, B., Edvardsson, B. (2020), Explaining how Platforms Foster Innovation in Service Ecosystems, Article presented at HICSS (Hawaii International Conference on System Sciences) 2020, Maui Hawaii January 7-10.
Professor in Business Administration
Professor in Business Administration