Innovation in Service Firms: Exploratory Analysis of Innovation Patterns

The aim of this paper is to contribute to the understanding of innovation in services. First, service firms were classified according to the degree of customization of service product and technology, because it reflects the degree of interaction between producer and consumer. This is a key element in the process of production and, hence, in the innovation developed by these firms. Second, we identified four different modes of innovation in Spanish service firms, which reflect diverse patterns of innovation according to depth of changes introduced by firms. Finally, we examined how the innovation patterns are generalized by the type of service firms, confirming that there is a relationship between production and innovation strategies. This paper yields empirical evidence from Spanish services, showing that service firms develop innovations coherently according to their production strategy.