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Digital innovation (Fichman, Dos Santos, & Zheng, 2014; Kohli & Melville, 2019) is the mainstay of the emerging industrial transformation, and we can conjecture that discovery of digital innovations is a key factor of the organization’s innovation capability, which, in turn, is known to provide a strong basis for obtaining and sustaining superior performance and competitive advantage (Barney, 1991). The problem is that innovation discovery, the search for innovations, is still ill understood as is the rest of innovation capability (Zawislak, Alves, Tello-Gamarra, Barbieux, & Reichert, 2012). This is particularly true for digital innovations: Digital innovations – like service innovations in general – remain under-researched as prior research has mainly focused on tangible innovations in product-oriented manufacturing industries (Ettlie & Rosenthal, 2011), while the needs, special requirements, characteristics, types and dimensions of intangible service innovations are widely thought to be fundamentally different. We also find a worrying discrepancy in the existing innovation management theory: this stream of literature promotes analytical approach to discovering innovations while innovations themselves are usually thought of as syntheses of knowledge (Criscuolo, Laursen, Reichstein, & Ammon Salter, 2018; Godin, 2015; Schumpeter, 1934) rather than results of an analysis. In sum, the picture of innovation discovery is murky, and this is unfortunate, because we are in the midst of a major economic transformation in which digital innovations should play the central role.
Digital transformation is a key enabler of the rising service economy, and digital innovations are increasingly thought of as service innovations rather than technological innovations (Barrett, Davidson, Prabhu, & Vargo, 2015). Digital technology ‘is embedded in the very core of the products, services, and operations of many organizations’ (Yoo, Boland, Lyytinen, & Majchrzak, 2012, p. 1398). Digitalization can benefit companies in numerous ways: by increasing revenues through new digital channels, by providing cost savings through e.g. automated processes, and by creating completely new digital services, products or even business models (Accenture, 2020; Glinkina, Ganina, Maslennikova, Solostina, & ViktorovnaSoloveva, 2020). This is possible only through digitalization of data, information, and knowledge presented in different forms (Agostini, Galati, & Gastaldi, 2020). ICT is an enabling element that has “a fundamental and transformative role as resources in service innovation” (Barrett, Davidson, Prabhu, & Vargo, 2015, p. 136). The conclusion here is that the service innovation, rather than the enabling technological innovation, should be the target of digital innovation discovery, which raises the question, how service innovation discovery should be framed to best orient the activity?
Service innovations have been researched for the past quarter century under the labels of service design and new service development (e.g. Nijssen, Hillebrand, Vermeulen, & Kemp, 2006). A key aspect of these efforts has been the high involvement of the customer in the service production. This reflects the origins of service research, which predates the heavy automation of service production. Since then service production has dramatically shifted in the sense that digital services are effectively defined at the time of systems development rather than the time of service encounter. To complicate matters, the types of service innovations vary from industry to industry, even from firm to firm. For example, Amara et al. (2009) identified six types of service innovation: product innovation, process innovation, delivery innovation, strategic innovation, managerial innovation, and marketing innovation. On the other hand, Corrocher et al. (2009) proposed four different types of service innovation including service product innovation, organizational innovation, external cooperation innovation, and technological innovation. To bring some order to this complexity, some researchers have sought to identify the key dimensions of service innovations.