The University for service innovation

The University of Cambridge and IBM  released a report challenging governments, businesses and universities to drive increased support and funding for service innovation. Service innovation aims to improve the numerous service systems that we encounter every day, through changes in the way that technology, people, organisation and information work.  The report, based on an international symposium sponsored by IBM and BAE Systems and held at Cambridge last summer, calls for a doubling of the funding for service education and research to ensure future economic prosperity and global competitiveness. More than 100 international academics and business leaders contributed to the report.  Entitled Succeeding through Service Innovation, the report highlights the fact that service systems such as transport, communications and healthcare now form the major part of the modern economy, but suffer from a lack of support compared to  manufacturing and technology research. This imbalance needs to be rectified, it argues.  According to the UN’s International Labour Organisation, service jobs outnumbered agricultural and manufacturing jobs worldwide for the first time in 2007. In Britain, 75 per cent of the labour force works in the services sector; in the United States, the sector accounts for more than 80 per cent of Gross Domestic Product.  A recent report from RTI International outlines that in developed economies, R&D investment in services typically accounts for less than one third of total R&D spending, while the service sector accounts for over two thirds of the GDP and jobs. The past few years have also seen many manufacturers of engineering products, such as BAE Systems and Rolls Royce, adopt service-oriented business models.  “Business models are changing and there are enormous opportunities for companies and economies that are able to integrate science, technology, production and service,” said Professor Mike Gregory, Head of the Institute for Manufacturing (IfM) at Cambridge University Engineering Department, co-authors of the report with IBM. “The report captures the latest international thinking in the field and provides a rich resource for policy makers, industrialists and academics to drive their policies on service innovation.”  In today’s economy, consumers expect service interactions to work seamlessly but, more often than not, these systems can break down, resulting in problems such as lost patient records, cancelled flights or mislaid luggage. Service interactions are equally critical between business organisations. Service innovation has the potential to transform customer experience through incremental or radical changes to the service systems that deliver the experience – examples range from self-service machines to online shopping, and from performance-based service contracts to shared business services.  “The growth of services economies, coupled with the evolution of businesses from  multinational businesses to globally integrated enterprises, calls for a new, multidisciplinary approach in order for individuals, industries and countries to remain innovative and competitive,” said Dr. James C. Spohrer, Director of Service Research at IBM. “Governments and businesses must play their part by developing and implementing service innovation roadmaps.”  “Service-orientation is critical for our future business model which we have been transforming over recent years. Our work with the University of Cambridge is contributing to this journey and the report is welcomed as an important signpost,” said Paul Tasker, Programme Director for Support Solutions Research at BAE Systems.  Technological and demographic changes, together with the development of the global economy, have all increased the scale and complexity of service systems. The same changes have left gaps in our understanding of how to manage the networks of people, technology and institutions on which thriving and successful services rely