Designs for life: new stakeholders and new spaces in the evolving services landscape

Designs for life: new stakeholders and new spaces in the evolving services landscape

Article Type: Guest editorial From: Foresight, Volume 17, Issue 4

Why this special edition

Changes in the global economy and in society as a whole – changes in production, consumption, communications and spatial distribution of activities – are both driven by and reflective of the growing role and scope of services activities. Indeed, it has been widely acknowledged throughout the past three decades that services are a critical and dynamic component in advanced and knowledge-based economies (Gallouj, 2002; Wolfl, 2005; Buera and Kaboski, 2009). The service sector has become increasingly significant not only as a result of its rapid development in terms of contribution to gross domestic product (GDP) and employment across large numbers of developed and developing countries, but also thanks to growing international trade in service products and, more recently, the recognition of services as a locus for substantial and potentially valuable (and sometimes “hidden”) innovation (Salter and Tether, 2006; Miles and Green, 2008). In a shift of focus from “pure manufacturing” or “pure services”, the study of innovation has engaged more recently with the increasingly complex intertwining of goods and services (Sundbo and Gallouj, 2000), a trend that is reflected in current debates such as those relating to “product-service systems” and the emergence of a “service-dominant logic”. Certainly the latter has become a rallying call for marketers and managers, reflecting the frequent privileging of service and consumer engagement and the re-direction of resources to service-oriented innovation. It is clear that in the past 20 years, we have witnessed a comprehensive shift in the nature, content and delivery of consumer services: while this shift is frequently driven by technological developments, it is also reflective of new and perpetually evolving patterns of consumption and purchase preference.

To date, a majority of foresight studies have focused on the roles and prospects for services and related innovation, as a component in economies and societies as a whole. Thus, most have not devoted particular attention to specific forms of services or their developmental trajectories, or to the factors that might shape their evolution and impacts. Indeed, some notable recent contributions aside (Gallouj et al., 2008; Miles, 2015), there has been a shortage of foresight research that engages directly with services functions, activities and outputs, or that addresses in any nuanced way, the features of innovation processes and outcomes at the sector-specific level. Moreover, there has remained a dearth of foresight work that addresses the social and community dimensions of services, and the factors at play in the evolution of public service development and delivery. This is especially relevant in an era of economic constraint and austerity, and one of political volatility. Perhaps one of the key questions that connects service sector studies with the discourses surrounding current turbulence is the future shape and role of services in social and economic life. Many other questions, some of which are normative, arise in this regard; for example, what new forms of services are emerging and what is driving and shaping their development; what roles can – and should – various actors in the public, private and third sectors take in the creation of innovative services, and what forms of partnership will be most effective in realising implementation; to what extent can community co-creation and development be mobilised in future innovation; how might successful “bottom-up” and community service innovations be best diffused; what factors and trends influence the nature and dynamics of service development in different service sectors and in different regions; and how might government agencies and business managers handle the challenges associated with innovation in destabilised and uncertain environments. It is such questions that we set out to address in this special issue of the journal Foresight.

As we start on this journey, it is worth considering too that in advancing scholarly activity in connection with the service economy, we are privileged to build on contributions to service innovation thinking and modelling that stretch back in excess of 35 years (Tether, 2004). Perhaps now is an appropriate time to look backwards as well as forwards, to acknowledge the foundations and ideas that underpin service innovation studies and to test the durability and continuing relevance of some early contributions. The turn of the 1980s witnessed publication of some pioneering works (Gershuny, 1978; Gershuny and Miles, 1983; Barras, 1986) and drew attention both to the socioeconomic circumstances and technological developments that might stimulate or require services innovation, and the dynamics and processes associated with such activity. The following decade saw a swarming of interest in service innovation and the emergence of debate with respect to the applicability of manufacturing-derived concepts to service activities, a debate that brought into play demarcationist, assimilationist and “rainbow” approaches (Coombs and Miles, 2000). This period too saw the development of work on the “specificities” of services, and the implications of these for the development of innovative service products. For example, Preissl (1998) examined the nature of barriers to service innovation, while de la Mothe and Paquet (1998) and Miles et al. (1995) sketched the particularities of services, qualities such as intangibility, interactivity, information intensity and transformativity. These contributors drew attention to some frequently found characteristics of service innovation including, inter alia, its’ often “bespoke” nature, the central role of the client in co-creation and co-terminosity of production and consumption. They also identified a range of innovation challenges associated with these features, for example difficulties in demonstrating service value and outcomes, the limited amenability of services to storage and cross-border trading, problems in raising investment support and in capturing rents and limited applicability of intellectual property protections. Some such arguments retained significant power for a considerable period, and their echoes, albeit nuanced ones, still shape our understanding of the possible and problematic in service development environments. However, new approaches to service innovation, for example goods-service bundling (Gadrey et al., 1995); technological developments, especially in the digital domain; and the sheer breadth of service activity imply modification and refinement of earlier conceptualisations. The innovation narratives reported in the papers below ask that we re-visit existing thinking and that we direct our energies to the development of new models that reflect evolving practices and realities. While there is much to learn from pioneering works, we are also required to think afresh as the contours of new service landscapes come into view.

Framing the issues: new challenges, new actors, new spaces

The points of enquiry listed above and timeliness of a review of continuity and change in our conceptualisations of service innovation provide the frame for this special issue. The theme of services futures, specifically the features and trajectories of next-generation services and the needs addressed, opportunities provided and challenges faced, is highly relevant at this juncture. Further framing this issue, is a focus on processes of, and responses to, social and economic transformation. Indeed, one of the key aims of this collection of papers is to reveal some of the myriad ways in which actors from outside the traditional commercial, industrial and academic spheres are becoming engaged in innovation and, frequently, taking this path as a means of protecting and advancing threatened interests. So too, the papers speak to the expanding spectrum of spaces and geographies – some until recently quite unlikely candidates – in which service innovation is becoming possible, desirable and positively transformative. While the special issue cannot hope to survey the multiplicity of new innovation actors, or the loci in which innovation is becoming a reality, it shines a light onto a selection of social and community-driven initiatives, and onto innovation in unusual and potentially promising spaces.

There is little doubt that advanced economies face a period of dramatic change, and those shaken most violently by the fallout from recent economic crises are revealing themselves as sites of extraordinary creative response to:

• fractures in long-standing expectations and entitlements; and

• the progressive degradation of welfare, personal and community support arrangements.

The extent and diversity of social and community innovations, i.e. primarily “bottom-up” innovations designed to address some of the problems generated and gaps left by contemporary capitalism (Pol and Ville, 2009), has grown remarkably in the past decade. The harnessing by community groups, social entrepreneurs and digitally or proximally connected activists of physical, intellectual, social and network resources to drive innovation that addresses needs that are not adequately met by conventional systems, has become an ever more present feature of the innovation landscape. An era of dramatic and dynamic economic change has also drawn attention to a posited polarisation in earnings, ownership of assets and access to resources. This, in turn, has stimulated debate with respect to how assets might be shared more equitably and the implications of this for corporations, governments and citizens. This debate is reflected in some of the papers in this special edition, specifically, those concerned with the emergence of novel and increasingly sophisticated “time banks”, evolving trajectories in the sphere of new public service design and new approaches to the generation, ownership and distribution of energy.

Responsive innovation, empowered service users

In Amantiadou, Gritzas and Kavoulakos’s essay on re-invigorated interest around and innovative creation of time banks in the Greek context, the authors speak both directly to the disruptions associated with contemporary capitalism, and to the eagerness of those affected most negatively to regain control of important aspects of their everyday lives. A badly wounded economy coupled with externally imposed austerity has provided a backdrop for the emergence of community and social entrepreneur-led initiatives that have at their heart the (re-) empowerment of ordinary citizens and the evolution of relevant, flexible and contemporary service solutions. As the power and will to act of public authorities has receded, so a re-balancing is evident and a shift to self-organisation has gained greater urgency. Amantiadou et al. describe a situation in which economic destabilisation and failing trust in established institutions has triggered greater recognition of individual responsibility and potential to effect change, movement towards conscious and collective planning, an upsurge in citizen and community activity and a search for alternative service models and economic relations. One such model is evident in the emergence of new time banks. The paper examines the creation, operation and features of these “banks”, operated as they are by informal citizen’s groups, loose affiliations of like-minded individuals or those with shared interests or more structured and organised collectives operated and underwritten by coalitions of third sector and municipal agencies. The paper analyses these initiatives as community/local currencies or barter systems, weighing the benefits to each stakeholder group of involvement and evaluating prospects for survival, growth, diffusion and replication. While it is too early to speak of embedding or contagion, initial successes in some circumstances, are impressive and the confidence generated by positive outcomes can be a trigger to further forms of community and collective service innovation. Where the state has failed, citizen groups have stepped-in to work creatively in their own interests and to imagine new possibilities or destinies. Perhaps, the genie is out of the bottle: adversity has driven citizen engagement, and the creativity thus unlocked is heady and powerful – the transition from public – private service innovation networks to citizen-third sector-public-private could be underway.

Continuing the themes of networked innovation and the creation of novel service solutions designed to fit more neatly the requirements of contemporary users, Sangiorgi and colleagues direct our attention to developments in the UK’s public sector. With a highly developed system of public welfare, health and education (one that accounts for almost half of UK GDP), politicians and policymakers have been seeking in the past two decades to secure progressive improvements in efficiency, effectiveness and value for money. Practitioners and managers too have demonstrated an eagerness to see enhancements to service provision and service outcomes, an orientation that is driven primarily by a strong public service ethos and a desire to deliver optimal results for service users. Pressure for the inception of improvement initiatives was heightened in the late ‘90s as political narratives associated with “third-way” thinking (Giddens, 1998) gained momentum. The “modernisation” agenda crystallised in the UK in the subsequent decade and became a battle standard for those seeking radical change in the management and delivery of public services. Proponents heralded an end to dogma, holding-out the promise of twenty-first century services for twenty-first century citizens in twenty-first century facilities. A major factor in the achievement of this goal would be greatly enhanced partnership with private sector organisations. Without wishing here to debate the merits, or otherwise, of the accelerated opening-up of the UK’s public services to private sector actors, it is clear that some successes can be recorded. Perhaps, notable among these is the contracting of design agencies and consultancies to assist in the strategic re-thinking of service design and delivery, and in the re-construction of individual services across the public sector (Green et al., 2012). In their paper, Sangiorgi and colleagues present an exploratory study of seven such agencies, each engaged to work for and within public institutions. Key questions for these researchers are broadly twofold: Q1. How are design professionals working towards and contributing to public sector innovation and transformation? Q2. What do the emerging practices of collaborative enquiry, problem identification, solution development and implementation tell us with respect to both possible future partnership models and success factors in the creative innovation of user-centric services?

Certainly, much has been written in recent years on the strategic role of design in business (Brown, 2009) and on collaborative co-development in the services as a whole (Gallouj and Windrum, 2009). However, much less is known with respect to the potential and strategic value of design in public services, or with respect to the contribution of design to improvement in both hard and soft outcomes for service users. Little is known too about the ways in which designers might successfully engage staff and users in the effort to support the co-design of relevant and bespoke services. These issues are at the heart of the paper, and findings from the study ask us to consider how we might beneficially utilise design talent and methodologies in the future to build public services that are both responsive to evolving needs and of the quality that users and tax payers might reasonably demand. The findings also speak to the closing days of an era of universal solutions: the authors argue that “one size fits all” public services will no longer be acceptable in an age of declining deference and informed consumption. In these circumstances, the development of flexible, user-focused and efficient co-created services will be of paramount importance. Where creative design methodologies can be brought into play, designers will enjoy a key strategic role in the creation and roll-out of next-generation public services.

The third paper in this special issue also connects with the future of fundamental supports to social and economic life, and one that has been at the centre of unfolding narratives in connection with sustainability, the environment and ownership of resources. As with those above, the paper focuses on the future role of citizens and communities as active participants in the creation of new and equitably beneficial futures. In their essay on the future of energy, Hyttinen at et al. commence by pointing out that the study of energy as a service has been surprisingly rare. They posit that, as a consequence, the nature of service innovation in the energy context has remained poorly understood, as has the prospect for the evolution of innovative energy service solutions into the future.

Adopting three theoretical frameworks and using these to drive empirical case studies, the authors present a qualitative trend analysis that explores the future of energy services in the context of sustainable energy systems. The authors introduce and examine the notion of “energy as a service”, and consider the implications of this for novel services that might in future support sustainable production, delivery and use of energy. Using foresight techniques and thinking, the paper sets out to build an enhanced understanding of possible developments in the energy sector and the forces that are likely to shape them. The analysis of empirical materials anticipates a future in which production and distribution of energy is democratised, and one in which environmental concerns will be paramount.

New and unfolding service spaces

Developing the themes of declining faith in existing institutions and arrangements, and the shifting and more informed nature of consumer behaviours, the paper from Scheibe and Mikolajewicz-Wozniak on the issue of emerging virtual currency schemes provides a fresh look at the financial services sector, the site for one of the first widely studied, technology-driven services innovations, the Automated Teller Machine. This sector is also one of critical importance in global economic terms and the one in which recent service innovation has not always resulted in the most desirable outcomes. Indeed, quite the reverse, as innovations in the US sub-prime property market triggered a near melt-down in the worldwide banking and credit system. The authors consider the potential of virtual currency schemes as a means of addressing the challenges associated with conventional currency and payment systems in a global economy, for example the high costs of intermediation, systems management, cash transactions and international exchange. They also consider the increasing willingness in some communities to question the value and legitimacy of established financial services providers and related regulatory authorities.

The paper acknowledges that the development of virtual currencies is clearly underpinned by developments in information and communication technologies (ICTs). However, it recognises that other drivers too, for example the globalisation of trade in goods and services, new trajectories in consumer preferences, disintermediation of trade relationships and downward pressure on cost, have helped to shape the evolution of novel currency schemes. Supporting their diffusion, new communications solutions have presented opportunities for direct and real-time contacts between consumers and producers, and also between consumers and consumers. Certainly, the past two decades have been characterised by dramatic increases in electronically mediated commerce across the business-to-business, business-to-consumer and peer-to-peer sectors. The authors argue that development in ICTs, coupled with the onward march of globalisation, creates an environment in which decentralisation and de-institutionalisation of commerce will spread and accelerate. Such a situation is opening possibilities for new digitally connected communities and the established financial sector alike: new spaces – those in which virtual currencies might find rapid success – are opening at a rapid pace. Using an established and well-tested approach, Scheibe and Mikolajewicz-Wozniak generate a set of axes that facilitate the creation of four scenarios, each embodying an alternative pathway and vision of the future. The opportunities and threats that are posed by virtual currencies for existing arrangements and conventional market organisation are considered, and the authors sketch the ways in which virtual currencies might radically re-shape the financial transactions landscape, opening new horizons and potentially calling forth a redefinition of the concept of money itself.

The paper from Näyhä, Pelli and Hetemäki picks-up the theme of new spaces for innovation with a contribution that provides unique insights into the forestry-based sector (FBS) and evolving forms of forest resource use. The paper notes the absence of previous research in the field, and offers a first systematic review and classification of services in the sector. It also argues for the application of foresight approaches as a means of generating a more nuanced understanding of the factors that will shape the ways in which the FBS and associated innovation will develop. Adopting the position that the FBS will have a central role in an evolving bio-economy, the authors focus on the ways in which foresight can inform policies, strategies and models for innovation within the sector. They also point to the role of foresight in both excavating opportunities for innovation and mapping the potential for sensitive and sustainable exploitation of resources. While forestry has enjoyed previous association with service provision, this has been restricted largely to the leisure industries, and innovation (in terms of products and processes) has been relatively low-key. Now that extended and novel markets are being opened for forest products, Näyhä et al. suggest that there is clear space for the creation of innovative services, particularly in relation to biomass and bio-energy. The arrival of new technologies and techniques is driving a reinvigorated focus on opportunities for forestry service innovation, and both private and public actors are exploring potential markets in sectors that have previously had little or no connection with forest industries and products. A reconceptualisation of forest products is underway and the future is likely to observe the partial re-casting of forest industries from primary to tertiary status.

Conclusion

Economic and social life in Europe (and beyond) has been confronted by a range of challenges – globalisation of business and commerce, the strengthening role of emerging economies, increased competition for raw materials, crisis in the financial system, growing complexity of the business operating environment, rapidly accelerating climate change and declining faith in commercial and state institutions – to name but a few. The papers selected for this special issue reflect some of these changes and speak to the ways in which service innovators are addressing their implications, frequently transforming challenges into opportunities and addressing current and evolving human, community and business needs. As editors of this special issue, we have attempted to represent the diversity of trajectories in and futures for service innovation, and to highlight the creativity of innovation actors as they respond to shifts in the technological, political, social and financial landscape. We have also focused here on the roles and efforts of new actor groups in the innovation milieu and on the opening of new spaces and markets for innovation. The future of services and related innovation will clearly be highly variegated, and many themes, including sector, region, socio-political developments and consumer demands, will shape the configuration of innovative products and solutions. We cannot guess the future of course, or in a publication of this nature, address comprehensively the spectrum of service activities. However, the application of foresight methods and thinking as practiced in the papers below can provide insights into the factors that will shape possibilities and trends, and hint with respect to the preparations required to work towards innovation for desirable and sustainable futures.

As we close this introduction, the editors would wish to extend our gratitude to all those who expressed an interest in contributing to the Special Issue, and especially those who proceeded to submit the full papers that have found their way into this edition. We would also wish to express our enormous thanks to those anonymous colleagues who gave so generously of their time in reviewing and providing feedback on earlier drafts of the papers. The insights and advice provided in this way have assisted enormously in shaping the special issue and in ensuring rigour and quality throughout. We hope that in this special edition, we have opened a door, albeit a small one, onto the factors, needs, efforts and aspirations that are shaping the creation and delivery of tertiary activities in this early part of the twenty-first century.

Lawrence Green

Director of Research: Art and Design at the Faculty of the Arts, Design and Media, Birmingham City University, Birmingham, UK.

Deborah Cox

Research Fellow at the Manchester Institute of Innovation Research, The University of Manchester, Manchester, UK.

Krzysztof Borodako

Senior Researcher at the Faculty of Management, Cracow University of Economics, Krakow, Poland.

References

Barras, R. (1986), “Towards a theory of innovation in services”, Research Policy, Vol. 15 No. 4, pp. 161-173.

Brown, T. (2009), Change by Design: How Design Thinking Creates New Alternatives for Business and Society, Harper Collins, New York, NY.

Buera, F.J. and Kaboski, J.P. (2009), “The rise of the service economy”, NBER Working Paper No. 14822.

Coombs, R. and Miles, I. (2000), “Innovation, measurement and services: the new problematique”, in Metcalfe, S.J. and Miles, I. (Eds), Innovation Systems in the Service Sectors. Measurement and Case Study Analysis, Kluwer, Boston, MA, Dordrecht, London, pp. 85-104.

De la Mothe, J. and Paquet, G. (1998), “Local and regional systems of innovation as learning socio-economies”, in De la Mothe, J. and Paquet, G. (Eds), Local and Regional Systems of Innovation, Kluwer Academic Publishers, MA.

Gadrey, J., Gallouj, F. and Weinstein, O. (1995), “New modes of innovation – how services benefit industry”, International Journal of Service Industry Management, Vol. 6 No. 3, pp. 4-16.

Gallouj, F. (2002), Innovation in the Service Economy: The New Wealth of Nations, Edward Elgar, Cheltenham.

Gallouj, F., Ganz, W. and Stare, M. (2008), “The futures of the service economy in Europe: a foresight analysis”, in Spath, D. and Ganz, W. (Eds), The Future of Services, Hanser, Munich.

Gallouj, F. and Windrum, P. (2009), “Services and service innovation”, Journal of Evolutionary Economics, Vol. 30 No. 3, pp. 141-148.

Gershuny, J. (1978), After Industrial Society? The Emerging Self-Service Society, Humanities Press, Atlantic Highlands, NJ.

Gershuny, J. and Miles, I. (1983), The New Service Economy: The Transformation of Employment in Industrial Societies, Praeger Publishers, New York, NY.

Giddens, A. (1998), The Third Way, Polity, Cambridge.

Green, L., Cox, D. and Bitard, P. (2012), “Design as a tool for innovation”, in Cox, D. and Rigby, J. (Eds), Innovation Policy Challenges for the 21st Century, Routledge, London.

Miles, I. (2015), “The future of services”, in Meissner, D., Gokhberg, L. and Sokolov, A. (Eds), Deploying Foresight for Policy and Strategy Makers – Turning Grand Challenges in Grand Opportunities through Science, Technology and Innovation, Springer.

Miles, I. and Green, L. (2008), Hidden Innovation in the Creative Industries, NESTA Futurlab, London.

Miles, I., Kastrinos, N., Flanagan, K., Bilderbeek, R., Den Hertog, P., Huntink, W. and Bouman, M. (1995), Knowledge-Intensive Business Services. Users, Carriers and Sources of Innovation, PREST, Manchester.

Pol, E. and Ville, S. (2009), “Social innovation: buzz word or enduring term?”, The Journal of Socio-Economics, Vol. 38 No. 6, p. 878.

Preissl, B. (1998), “Barriers to innovation in services”, SI4S Topical Paper, STEP Group.

Salter, A. and Tether, B. (2006), “Innovation in services: through the looking glass of innovation studies”, Background Paper for Advanced Institute of Management (AIM) Research’s Grand Challenge on Service Science.

Sundbo, J. and Gallouj, F. (2000), “Innovation as a loosely coupled systems in services”, in Metcalfe, J.S. and Miles, I. (Eds), Innovation Systems in the Service Economy: Measurement and Case Study Analysis, Kluwer Academic Publishers, London.

Tether, B. (2004), “Do services innovate (differently)?”, CRIC Discussion Paper No. 66, Manchester.

Wölfl, A. (2005), “The service economy in OECD countries”, OECD STI Working Paper No. 2005/3, Organisation for Economic Co-Operation and Development – Economics Department.