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Top1. Introduction
Open innovation has been widely practiced to value both internal and external resources to sustain their service systems. On the contrary, prior studies in open innovation on services borrowed the concept from existing literature of open innovation in manufacturing industries (Gianiodis, et al., 2014; Mina, et al., 2014), that viewed open innovation with Goods-Dominant Logic (G-DL).
Vargo and Lusch (2008) defined service using Service-Dominant Logic (S-DL) perspective not as the contradiction from goods, and does not discriminate service sectors from manufacturing industries. It is in line with Lusch and Nambisan (2015), to not distinguish between “service innovation” and “product (goods) innovation”. S-DL strengthens that all product innovations are service innovations, and products are only a medium to deliver service. Despite the emphasis of the innovative evidence on service companies, the literature in analyzing open innovation practices in service are still scarce (Mina, et al., 2014), not to mention those viewed in S-DL. Thus, to explicate open innovation from various industries, it is essential to identify generic constituent characteristics of open innovation of service.
Service conceptualization in S-DL fits well with the concept of exchanging resource in open innovation. S–DL suitable for studying open innovation processes based on two folds. First, it highlights the importance of integration and transformation of operant resources lying outside of the innovating firm into complex and innovative service offerings (Thanasopon et al., 2016). Second, the nature of service transformed from the individual organization offering to a network offering (Carroll and Helfert, 2015), in line with open innovation in leveraging a network of contributors.
Recent research directions acknowledge that service-oriented logic is important to innovation (Hollebeek and Andreassen, 2018; Abdelkahfi and Hilbig, 2013). It has been acknowledged that S-DL addresses “open” process in innovation activities (Wilden, et al., 2017). Though many studies in service innovation have taken S-DL perspective, still there is no link between service innovation and open innovation in the literature (Wilden, et al., 2017). Also, none of these research using open innovation approach or only marginal studies on open innovation admitted S-DL (Randhawa, et al., 2016). Thus, more focused research agenda is needed to specifically address to open innovation.
This study aims to describe open innovation concept through service-oriented logic by explicating the phenomena of open innovation of service with existing business cases. S-DL arises from the study of service systems, and views value exchange between entities as the applications of their corresponding resources and competences, which are not rooted in the traditional manufacturing versus service dichotomy. In the settings of open innovation, S-DL explains that value is co-created by stakeholders, inside and outside of an organization, forming a service system to generate and deliver value, in which institutionalization mobilizes service ecosystems (Vargo and Lusch, 2017).
The study explicates the tripartite framework proposed by Lusch and Nambisan (2015) consisting of three elements: service ecosystem, service platform, and value co-creation, grounded in the S-DL. Multiple case study is utilized to identify different categories of business as evidences to articulate and to extract key characteristics of open innovation of service. These categories of explicated business evidences serve as an archetype to derive potential strategies.
The paper is organized as follow. First, the study is started with literature review on open innovations and S-DL studies to specify the generic characteristics of open innovation of service, which eliminates the discrepancy of open innovation in product vs. service. Second, multiple case studies are obtained and categorized based on how they invite participants into their service ecosystems. Third, six characteristics are exemplified to see how they are applied to business cases in different categories. At last, the findings are used to identify the constituent characteristics in formulating open innovation strategies, by which four categories of business cases serve as examples to guide open innovation of service in corresponding industries.