henri lahtinen kimmo viljamaa rene wintjes - itccanarias.org presentation h... · signed by...

This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission

ESIC - analysing the impact of service innovation

Henri Lahtinen Kimmo Viljamaa

Rene Wintjes

The Canary Islands June 2013


Agenda 7.6.2013

• Opening of the event – Juan Ruiz Alzola, Canary Islands Government

• The EC road towards ESIC

• ESIC – why and what?

• Introduction to service innovation

• First findings and ideas

07/06/2013 • 2


European Commission and service innovation

• The EC has a long tradition with SI

- Europe INNOVA initiative (2006 -2012)

- The Innovation Policy Project in Services (IPPS) (2006 -2007)

- EPISIS project (2009 -2012)

- And now ESIC (2013 -2014)

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Europe INNOVA 2006 -2012

• An initiative for the development, testing and promotion of new tools and instruments in support of innovation - Second phase (2009 -2012) built around three

European Innovation Platforms: KIS-IP, Cluster-IP and ECO-IP • KIS-IP - accelerated the uptake of service

innovations (e.g. design and testing of new service packages and new forms of service delivery)

- Annual EI conferences attracted wide range of stakeholders to discuss and learn about SI

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The Innovation Policy Project in Services (IPPS) (2006 -2007)

• Coordinated by Tekes (Finnish Funding Agency for Technology and Innovation)

• Funded by the EC • Formed the basis for the service innovation policy

community • Resulted in:

- Mapping studies (the state of the art of service related innovation policy and activities)

- the European Services Innovation Memorandum (MoU), signed by Finland, Estonia, Germany, the Netherlands, Norway, Slovenia, Sweden and the region of Western Greece in December 2007

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European Policies and Instruments to Support Service Innovation 2009 -2012

• Coordinated by Tekes (Finnish Funding Agency for Technology and Innovation)

- partners: Danish Agency for Science, Technology and Innovation (DASTI), Department for Business, Innovation and Skills (BIS, the UK), Project Management Agency (PT-DLR, Germany), and Vinnova (Sweden)

• Funded by the EC

• Promoted development of service innovation at policy, strategy and operational levels

• Method: transnational cooperation facilitated by 8 Think Tank meetings and three conferences

• Launch of Helsinki principles, June 2012

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Lessons learnt • Services are becoming increasingly important for the (regional)

economy - Services accounted for 93% of value added growth between

1990 and 2006, and for 82% of total value added in 2006; services constituted 83% of total jobs in 2006; and wage growth and skill levels are as high and higher in services than in manufacturing (McKinsey Global Institute)

- Success of manufacturing depends, for instance, very much on innovative services like design, marketing and logistics as well as on product related after-sales services and vice versa.

- Utilisation of service innovation often calls for improvement in supply-side drivers (skills, financing), demand-side drivers (public demand, customer proximity) as well as enables (regulation, standardisation)

• From projects to initiatives having larger impact - > establishment of European Service Innovation Centre

07/06/2013 • 7

This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission This work is a part of a service contract for the Enterprise and Industry Directorate-General of the European Commission 07/06/2013 • 8

European Service Innovation Centre

ESIC


ESIC – why and what?

• ESIC = European Service Innovation Centre (platform) - a two-year initiative commissioned by the General Directorate (DG)

Enterprise and Industry of the European Commission

• ESIC demonstrates the structural impact of service innovation in practice (European Service Innovation Scoreboard – ESIS)

• ESIC will: - Help regions to test, update and improve their existing policies, - Boost emerging industries by transformative service innovation

• The process when services “disrupt traditional channels to market, business processes and models, to enhance significantly customer experience in a way which impacts upon the value chain as a whole”. In this way, service innovation is shaping emerging sectors, industries and markets and contributes to structural change and industrial modernisation (The Smart Guide to Service Innovation)

- Mobilise a versatile network of service innovation intelligence

07/06/2013 • 9


Process so far

• Summer 2012: selection of the six model demonstrator regions (Canary Islands, Emilia-Romagna, Limburg [replaced the Basque Country], Luxembourg, Northern Ireland, Upper Austria)

• Autumn 2012: selection of consortium led by Ramboll Management Consulting to establish the European Service innovation Centre (ESIC)

• Spring 2013: ESIC work started by laying the grounds for the scoreboard, by collecting data from the regions and by conducting the study visits as well as establishing the communication platform

07/06/2013 • 10


1. The Scoreboard • To capture and demonstrate the

impact of the transformative power of services innovation to change sectors and services innovations' contributions to structural change

• Development of a database with 15-20 key indicators that illustrate the sectoral and macro-economic impact of service innovation

• Indicators will be validated in an expert workshop in September 2013

• ESIS will be published in October 2013 and updated in 2014

07/06/2013 • 11


2. Regional stress-tests

1. Regional profile (statistics)

2. Regional base-line & needs assessment related to service

innovation (including study visit)

3. Policy-makers’ self-assessment of current policy mix

4. Two-day peer-review –> bottlenecks, barriers, etc

5. Policy briefing for future options


• Promotion and dissemination of activities and lessons

- Website

- Newsletters

- Events (Conf. Q4/2014)

• Mutual policy learning

• Awareness of the large scale impact of service innovation

http://ec.europa.eu/enterprise/initiatives/index_en.htm

3. Learning platform


What is service innovation?

07/06/2013 • 14

“It is not the strongest nor the most intelligent that survive, but those most adaptive to change.”


A few definitions..

• Service is a perspective on value creation and customers define service on the basis of value-in-context and the resulting customer experience ->

• Service innovation can be based on a new role for the customers as co-creators, a new customer interface, technological options or new ways of capturing value and business models (Bo Edvardsson)

• Nature of service innovation is intangible and non-technological

• New or significantly improved service concepts (in service and manufacturing companies alike) (Smart Guide for Service Innovation)

07/06/2013 • 15


Anything but regular R&D

• Innovations in:

- service process (e.g. IKEA)

- service infrastructure (e.g. cloud computing)

- customer processing (e.g. TripAdvisor, Trivago)

- business models (e.g. KONE/people flow)

- Commercialisation (multi-channel trade, combination of regular stores and online shopping)

07/06/2013 • 16


Case example: Starbucks

• Not just about coffee

• Branding and experience: - Selling back to a busy customer the

twenty minutes each day he/ she will look forward to most…

• Use of IT - Using a smart phone to locate the

closest Starbucks

- Drink builder feature

- Food menu with nutrition facts

07/06/2013 • 17


Manufacturing and services

• Service innovation cuts horizontally the whole economy

• Service activities/business is performed in all industries

• Intangible parts of the value chain are increasingly important revenue generators for manufacturing industry (visible especially well in the automobile industry, e.g. Rolls Royce sells uptime)

• Manufacturing and services are becoming more and more interlinked

07/06/2013 • 18


Do’s and don’t for implementing transformation through service innovation

Don’t Do’s

Focus only on research and technological innovation Focus on all forms of knowledge and innovation

Support service innovation as such Support transformation through service innovation

Support individual specialised firms Support clusters or networks of related firms

Focus on a given set of service sectors Focus on manufacturing and services

Copy-paste best practice Search for the next practice

Follow growth trends without reflection Capitalise upon regional competences for the development of emerging industries

Follow a horizontal approach without specific target Follow a systemic approach

Follow a narrow sectoral approach Follow a cross-sectoral approach

Launch pilot projects in isolation Launch large-scale demonstrator projects through a systemic approach

Find a problem for an innovation (i.e. search commercialisation)

Find an innovation that can solve a problem (i.e. addressing challenges)

07/06/2013 • 19


ESIC and the Canary Islands

07/06/2013 • 20


Objectives of the study visit

• Acquire more information by conducting group interviews with key stakeholders

• Assess whether the regional policy mix is conducive to the transformation of existing sectors/models via the application of service innovation processes and concepts

• Get a better understanding of how the regional stakeholders are engaged in the implementation of regional strategies

• Identify barriers, bottlenecks and challenges as well as opportunities related to transformation of the Canary Islands tourism sector

07/06/2013 • 21


Service Innovation Policy Approaches

07/06/2013 • 22


First findings

Based on regional benchmarking, data collection and interviews

07/06/2013 • 23


Draft benchmarking analysis for the Canary Islands

• Each ESIC ‘demonstrator’ region is benchmarked against: - EU27 average - Five other demonstrator regions - Most ‘statistically similar’ regions : BE33 Prov. Liège, DE41

Brandenburg – Nordost, DK02 Sjælland, NL12 Friesland, NL13 Drenthe, UKC1 Tees Valley and Durham, UKC2 Northumberland and Tyne and Wear, UKL1 West Wales and The Valleys, UKL2 East Wales

• For five broad categories of indicators: - General socio-economic situation in the demonstrator region - Technology and innovation orientation of the demonstrator region - Attractiveness of the demonstrator region - Service orientation of the demonstrator region - Structural change in the demonstrator region - Qualitative indicators on ‘governance’

07/06/2013 • 24


Statistical profile for the Canary Islands (Data sources: Eurostat, European Cluster Observatory)

• About 2.1 million inhabitants, above-average share of employees with tertiary education (29.3%) compared to other demonstrator regions, and comparable with the EU level (30.4%)

• GDP 2009 (€/inhab.) below that of the most similar regions as well as the EU27

- GDP per capita increased steadily until 2007, and grew again in 2010 after marginal decrease

• In 2011, more than 80% of employment in services (82.8%)

- Employment in knowledge-intensive services above the levels for all other regions, with an upward trend

• Unemployment rate in 2012 (33%) high above EU27 average (10.2%) and also above the average of other demonstrator regions

- Unemployment kept decreasing until 2008, and was followed by steep increase, in addition the relative performance has worsened compared to other regions

• Expenditure on R&D (0.51%) is below other similar regions (0.71%) and clearly below EU27 (1.38%); only one fifth is spent by the business sector

• Regional specialisation in: tourism and hospitality, construction, tobacco..

• Distinct features: insularity, double insularity, remoteness, and scarcity of natural resources


Employment in knowledge-intensive services (% total employment)

07/06/2013 • 26

25,0

30,0

35,0

40,0

45,0

50,0

55,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Most similar regions Canarias (ES) Demonstrator regions ES EU27


Employment in service innovation intensive industries (% total employment)

07/06/2013 • 27

0,0

1,0

2,0

3,0

4,0

5,0

6,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Most similar regions Canarias (ES) Demonstrator regions ES EU27


First thoughts based on the interviews

• There is a lot of potential to diversify the tourism sector on the Canary Islands

- ICT, Agri-food, green industries, logistics and ICT can push innovation in tourism

• There are, however, also lot of lacks - Knowledge and skills - Cross sectoral co-operation, public-private cooperation - Culture of innovation - Flexibility (regulation, level of bureaucracy, taxation) - Incentives (to change, dependence on tour operators)

• Pilots or good examples needed to increase knowledge (LOPESAN, El Hierro as a demonstrator of joint commitment and dedication to sustainable community)

07/06/2013 • 28


Framework conditions Mass

Tourism - sand,sea,sun

Rural tourism

Green tourism

wellness & medical tourism

adventure, nature, sports

tourism

07/06/2013 • 29

Energy, environment

ICT

Agro-food

Transport, logistics


Next steps /tentative schedule

• Study visit (June 4th -7th)

• Analysis of regional service innovation policy mix (May – June 2013)

• Draft policy assessment report (end of August 2013), final report (mid-September 2013)

• Peer review meeting, (September 26th -27th)

• Policy briefing (March 2014)

07/06/2013 • 30


Contacts • Project Officer

Agnieszka Truszcynska [email protected]

• ESIC Management Kimmo Halme [email protected]

• ESIC Coordination Henri Lahtinen [email protected]

• ESIC Scoreboard (ESIS) Hugo Hollanders [email protected]

• ESIC Regional consultation & Stress tests Alasdair Reid [email protected]

• ESIC Communication & Events Hanna Koskela [email protected]


Thank you!

07/06/2013 • 32

http://ec.europa.eu/enterprise/initiatives/index_en.htm

henri lahtinen kimmo viljamaa rene wintjes - itccanarias.org presentation h... · signed by...

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