Towards an Understanding of Open Innovation in Services: Beyond the Firm and Towards Relational Co-creation

  • Melissa EdwardsEmail author
  • Danielle Logue
  • Jochen Schweitzer


An increasingly global and connected market environment sees many service providers struggling to find a competitive position and to grow their business sustainably. The shift from a product-dominant logic to a service-dominant market logic pressures businesses to look for new and effective ways of engaging with customers throughout the innovation process. At the same time, managers are faced with so called ‘wicked problems’ that call for more creative problem solving and lateral thinking in corporate innovation practices. In this chapter we discuss how recent developments of open innovation and design thinking can be applied to services and assist in service innovation. We explore how the co-creation of value is itself a service innovation, and the simultaneous impact of such co-creation practices through relational conversations with customers and a broad range of stakeholders. Co-creation becomes an element of the service offering, drawing customers into the value web and blurring the boundaries of the firm. We do this by discussing three cases as examples of open co-created innovation, and reflect on implications for service innovation, especially where propriety of the service innovation may be ambiguous. In comparison with existing open innovation frameworks, we propose a co-creation approach to open service innovation that goes beyond common ‘inside out’ or ‘outside in’ dichotomies.


Open service innovation Co-creation Relational approach 


  1. Aas TH, Pedersen PE (2010) The firm-level effects of service innovation: a literature review. Int J Innov Manage 14(5):759–794CrossRefGoogle Scholar
  2. Afuah A (2009) Strategic innovation: new game strategies for competitive advantage. Routledge, New YorkGoogle Scholar
  3. Afuah A, Tucci CL (2012) Crowdsourcing as a solution to distant search. Acad Manage Rev 37(3):355–375CrossRefGoogle Scholar
  4. Botsman R, Rogers B (2010) Collaborative consumption.
  5. Boudreau KJ, Lakhani KR (2009) How to manage outside innovation. MIT Sloan Manage Rev 50:69–76Google Scholar
  6. Brown T, Katz B (2009) Change by design: how design thinking transforms organisations and inspires innovation. HarperCollins, New YorkGoogle Scholar
  7. Buchanan R (1992) Wicked problems in design thinking. Des Issues 8:5–21CrossRefzbMATHGoogle Scholar
  8. Camillus J (2008) Strategy as a wicked problem. Harvard Bus Rev 86(5):98–101Google Scholar
  9. Chen JS, Tsou HT, Ching RK (2011) Co-production and its effects on service innovation. Ind Mark Manage 40(8):1331–1346CrossRefzbMATHGoogle Scholar
  10. Chesbrough H (2003) The era of open innovation. MIT Sloan Manage Rev 44:35–42Google Scholar
  11. Chesbrough H (2011) Bringing open innovation to services. MIT Sloan Manage Rev 52(2):85–90Google Scholar
  12. Chesbrough H, Appleyard M (2007) Open innovation and strategy. Calif Manage Rev 50(1):57CrossRefGoogle Scholar
  13. Chesbrough H, Crowther AK (2006) Beyond high tech: early adopters of open innovation in other industries. R&D Manage 36(3):229–236CrossRefGoogle Scholar
  14. Christensen CM, Cook S, Hall T (2005) Marketing malpractice: the cause and the cure. Harvard Bus Rev 83(12):74–83Google Scholar
  15. Churchman CW (1967) Wicked problems (Front material 5—No Title. 1967). Manage Sci 14(4):141CrossRefGoogle Scholar
  16. Dahlander L, Gann DM (2010) How open is innovation? Res Policy 39(6):699–709CrossRefGoogle Scholar
  17. de Jong J, Vermeulen P (2003) Organizing successful new service development: a literature review. Manage Decis 41(9):844–858CrossRefGoogle Scholar
  18. den Hertog P (2000) Knowledge-intensive business services as co-producers of innovation. Int J Innov Manage 4(4):491–528MathSciNetCrossRefGoogle Scholar
  19. Dodgson M, Gann D (2006) The role of technology in the shift towards open innovation: the case of Procter & Gamble. R&D Manage 36(3):333–346CrossRefGoogle Scholar
  20. Grönroos C (2008) Service logic revisited: who creates value? and who co-creates? Eur Manage Rev 20(4):298–314Google Scholar
  21. Howe J (2008) Crowdsourcing: how the power of the crowd is driving the future of business. Random House, New YorkGoogle Scholar
  22. Hsueh JT, Lin, NP, Li HC (2010) The effects of network embeddedness on service innovation performance. Serv Ind J 30(10):1723–1736Google Scholar
  23. Huizingh EK (2011) Open innovation: state of the art and future perspectives. Technovation 31(1):2–9CrossRefGoogle Scholar
  24. Jakovich J, Schweitzer J, and Edwards M (2012) Practicing—U.lab handbook of design-led innovation. Freerange Press, MelbourneGoogle Scholar
  25. Jeppesen LB, Lakhani KR (2010) Marginality and problem-solving effectiveness in broadcast search. Organ Sci 21:1016–1033CrossRefzbMATHGoogle Scholar
  26. Lakhani KR, Fayard AL, Levina N, and Pokrywa SH (2012) OpenIDEO (February 24, 2012). Harvard Business School Technology & Operations Mgt. Unit Case No. 612-066. Available at SSRN:
  27. Langer B, Seidel V (2012) Open innovation where “everyone’s a winner”: experiential learning in community-based innovation contests. Working Paper Series, Said Business School, University of Oxford, UKGoogle Scholar
  28. Lee SM, Olson DL, Trimi S (2012) Co-innovation: convergenomics, collaboration, and co-creation for organizational values. Manage Decis 50(5):817–831CrossRefGoogle Scholar
  29. Lusch RF, Vargo SL, Malter AJ (2006) Taking a leadership role in global marketing management. Org Dyn 35(3):264–278CrossRefGoogle Scholar
  30. Mention A (2011) Co-operation and co-opetition as open innovation practices in the service sector: which influence on innovation novelty? Technovation 31(1):44–53CrossRefGoogle Scholar
  31. O’Mahony S, Ferraro F (2007) The emergence of governance in an open source community. Acad Manage J 50:1079–1106CrossRefGoogle Scholar
  32. Paulini M, Murty P, Maher, ML (2011) Understanding collective design communication in open innovation Communities. The University of Sydney, Sydney, Australia
  33. Rittel H, Webber M (1973) Dilemmas in a general theory of planning. Policy Sci 4(2):155–169CrossRefGoogle Scholar
  34. Rohrbeck R, Hoelzle K, Gemünden HG (2009) Opening up for competitive advantage: how Deutsche Telekom creates an open innovation ecosystem. R&D Manage 39(4):420–430CrossRefGoogle Scholar
  35. Rowe PG (1987) Design thinking. The MIT Press, CambridgeGoogle Scholar
  36. Vargo SL, Lusch RF (2004) Evolving to a new dominant logic for marketing. J Mark 68(1):1–17CrossRefGoogle Scholar
  37. Vogel CM (2009) Notes on the evolution of design thinking: a work in progress. Des Manage Rev 20:16–27CrossRefzbMATHGoogle Scholar

Copyright information

© Springer-Verlag London 2015

Authors and Affiliations

  • Melissa Edwards
    • 1
    Email author
  • Danielle Logue
    • 1
  • Jochen Schweitzer
    • 1
  1. 1.University of Technology SydneyUTS Business SchoolUltimoAustralia

Personalised recommendations