Developing service-inclusive systemic policy: Four approaches

Although policy makers dealing with innovation are increasingly interested in services, the debate on how to formulate policy for spurring service innovation is still fairly nascent. To a large extent, existing misunderstandings and overly narrow perspectives are due to a lack of insight in the various roles services can play in innovation systems. This paper offers an analytical structure for incorporating service innovation support in a systemic policy mix. First, we describe the three phases in the evolution of service innovation thinking, and extend them with an additional point of view. Each viewpoint relates to a different potential for economic transformation in and through services. By establishing a link with the functional perspective on innovation systems, we show how the four approaches imply preferences for particular instruments in the spectrum of specific and generic policy. Specifically, we argue that
each approach corresponds to a specific configuration of measures that jointly can ensure the strength of various system functions. Using the evidence from a comparative case study of two similar regions, we illustrate how the alternative approaches can be used for classification and comparison of service
innovation policy options. We conclude by discussing possibilities for further research and policy formulation.