Absorptive capacity and network orchestration in innovation communities – promoting service innovation

Abstract

Purpose– The purpose of this study is to increase understanding of service innovation in networks. Especially the most loosely coupled forms of innovation networks, innovation communities, can be valuable in service innovation, but may not be manageable in the traditional sense. Rather, they may require orchestration characterized by discreet guidance that also accommodates the specific nature of services. Through informed orchestration, it is possible to deal with several contingencies, and influence the absorptive capacity at the network level to generate new service innovations.Design/methodology/approach– These issues are examined through literature review and a case study.Findings– The findings suggest that individual orchestration mechanisms may be more closely connected to certain contingencies than others, and that both orchestration mechanisms and contingency factors have a role in absorptive capacity development within service innovation networks.Research limitations/implications– While the case study approach limits the possibility to make wide generalizations, the in-depth insights provide valuable knowledge.Practical implications– There has been a shift from inter-firm competition towards competition between networks of organizations, increasing relevance of absorptive capacity at the network level.Originality/value– Despite the recent increase in service innovation literature, research on service innovation taking place in networks is scant. Knowledge on some aspects can be derived from more traditional notions on technological innovation, but both the distinctive features of services and central characteristics of innovation networks make it necessary to reconsider some of the established views. In particular, managing – or rather orchestrating – service innovation is still a challenging area.