Understanding the role of technology in service innovation: Comparison of three theoretical perspectives

Service innovation has been considered as a new way to gain competitive advantage and enhance firm performance in a highly competitive market. In addition, technology is believed to encourage and facilitate service innovation. Although several service innovation studies have stressed the importance of technology in service innovation, the roles of technology in service innovation are at the center of debates in service innovation literature. One major research stream in service innovation regards technology as a service innovation dimension (e.g., Gallouj and Weinstein’ and den Hertog’s service innovation frameworks), whereas another major stream considers it an operant resource (e.g., service-dominant logic, resource-advantage theory). The contradictory situation induces the necessity to better understand the role of technology in service innovation. Therefore, this study aims to identify the role of technology in service innovation, i.e., whether it is one of service innovation dimensions or of operant resources. From a resource-based approach, this study proposes a model which considers technology as an operant resource and investigates the impact of technology on firm performance through three service innovation strategies (i.e., service creation-focused, service delivery-focused, and customer interaction-focused strategies). From a dimension-based approach, we also propose two competing models that view technology as a service innovation dimension. In the competing models, technology can influence firm performance either as a mediator between operant resources and performance, or as moderator between service innovation strategies and performance. Based on empirical data from 224 service firms in Korea, we explain the role of technology in service innovation. Our findings indicate that each approach can be used to create different theoretical arguments that explain how to leverage technology in service innovation. Our findings also show the most acceptable role of technology within this study. Keyword: Service innovation, Service innovation strategy, Technology, Operant resource.