Service innovation: Inward and outward related activities and cooperation mode

Knowledge of how customers co-create value, the way that suppliers and providers co-produce services, and how research and development centers and universities transfer technologies is becoming increasingly important to scholarsʹ understanding of service innovation. This paper presents an analysis of the relationship between inward and outward innovation activities in service organizations and their modes of innovation, using network innovation premises and an extended innovation model. Empirical data from retail, health and education sector service organizations show the existence of a relationship between the degree of development of the inward innovation process and the degree of development of outward innovation activities. The majority of service organizations have innovation processes with an orientation toward customers and suppliers rather than other service network members, and leading service organizations follow a path that the literature defines as oriented toward the service value network. Findings lead to implications of how innovation managers could develop their internal innovation capacity to balance inward and outward activities properly.