The document summarizes the European Service Innovation Centre conference held in Helsinki, Finland in 2014. It discusses five sessions on topics related to service innovation and its importance for European industries and regional competitiveness. Specific policies and approaches are presented, including large-scale demonstrators, systemic innovation ecosystems, and knowledge-intensive business services playing key roles in innovation networks. The conference is contrasted with the Slush startup event, noting Slush's entrepreneurial focus on customer-centric services and business models enabled by new technologies.

1. © 2014 IBM Corporation
European Service Innovation Centre Conference
9-10 September, 2014 in Helsinki, Finland
Observations
in contrast with Slush 2014!
Juha Hulkkonen – juha.hulkkonen@fi.ibm.com, twitter: @jhulkkonen
11 February 2015

2. © 2014 IBM Corporation2
European Service Innovation Centre Conference 2014
Five sessions:
Why Service Innovation matters to the Renewal of European Industries and to the
Competitiveness of European Regions?
Where do European Regions stand in Service Innovation Performance?
Regional Efforts to address Challenges in Service Innovation Policies
How to follow a Large-Scale Demonstrator and Cluster Approach towards an effective
Service Innovation Ecosystem?
The Way forward -Implications for European Service Innovation Policies

3. © 2014 IBM Corporation3
Background to ESIC
Final report of the Expert Panel on
Service Innovation in the EU in February
2011
Recommendations on “the need to
capitalize on the ‘transformative
power of service innovation’ and to
applying a ‘demonstrator
approach’ through which service
innovation can be capitalized upon
in a more systemic and holistic
manner.”
Six model demonstrator regions
Workshops
European Service Innovation
Scoreboard
http://ec.europa.eu/enterprise/initiatives/esic

4. © 2014 IBM Corporation4
First Session: Why Service Innovation matters to the Renewal of European Industries and to the
Competitiveness of European Regions?
From technology programmes to broad-based innovation system approach –
Policy experiences from Finland
Petri Lehto, Head of Division at the Enterprise and Innovation Department, Ministry of Employment and the
Economy
Next:
Feelings – intangible
value creation based
on experiences and
meanings that
customers add on
different products and
services.

5. © 2014 IBM Corporation5
First Session: Why Service Innovation matters to the Renewal of European Industries and to the
Competitiveness of European Regions?
How does a region shift from a path of disadvantage or limited
growth to another path based on growth and innovation?
Systemic innovations and systemic policies as a different
approach to regional policy (vs Project Teams/Policy
Projects/Policy Silos)
Systemic approach for service innovation: focus on cross-
sectoral linkages, relationships between services providers
and clients
Services duality and innovations: producer services, production-
related and product-related services, hybrid products and
hybrid production systems embedding services with
products
Producer services and urban transformation: Employment
dominated by business and professional services in nearly
all cities. Locations for major concentrations of producer
services engaged in exports.
Example: UK Space Industry – UK does not neet astronauts to
be big in the space industry
Keynote address: The regional dimension of service innovation and the need for
a systemic approach
John R Bryson, Professor, University of Birmingham
Continual increase in knowledge, service and experience content of goods and services
All production systems have become hybrid systems.
Emergence of hybrid products.

6. © 2014 IBM Corporation6
First Session: Why Service Innovation matters to the Renewal of European Industries and to the
Competitiveness of European Regions?
Customer demands
expand rapidly
Quality of life depends
on service systems
Organizations should
(and can) act now
We are embedded in
nested service systems
The service systems
framework enables
organizations to identify
their service ecosystems
Forces
Connected & Open
Simple & Intelligent
Fast & Scalable
Consumers are demanding
greater sophistication
Organizations are
increasingly pressured to
catch-up
Organizations must rethink
services based on to which
ecosystems they belong
Changes are necessitating
smarter service systems
Technology expands what
is possible
Reduce implementation
time from months to days
and hours
CloudAnalytics
Social Mobile
“…for the first
time, we now
have technology
affecting every
single sector of
the economy.”
James Manyika
IBM's approach in the global service market
Juha Hulkkonen, Business Development Executive, IBM Finland

7. © 2014 IBM Corporation7
First Session: Why Service Innovation matters to the Renewal of European Industries and to the
Competitiveness of European Regions?
A new approach to supporting innovation: The Demola case
Petri Räsänen, Director (Innovation and Foresight), Council of Tampere Region

8. © 2014 IBM Corporation8
Second Session: Where do European Regions stand in Service Innovation Performance?
Introduction to the European Service Innovation Scoreboard
Andrea Zenker, Fraunhofer ISI (European Service Innovation Centre), Emmanuel Muller, Strasbourg
Conseil (European Service Innovation Centre)

9. © 2014 IBM Corporation9
Third Session: Regional Efforts to address Challenges in Service Innovation Policies
How to combine various innovations
effectively and disseminate them
rapidly.
Systemic problems cannot be
identified directly. They manifest
themselves in various practical
problems.
Need for integrators
The role of knowledge intensive
business services: often nodes in the
networks of clients, cooperation
partners, public institutions and R&D
establishments.
Keynote address: How service innovations can transform whole industries and
regional ecosystems?
Marja Toivonen, Member of the High Level Group on Business Services, VTT (Technical Research Centre of
Finland)

10. © 2014 IBM Corporation10
Third Session: Regional Efforts to address Challenges in Service Innovation Policies
Needs
- Change policy paradigm at the
local/regional level
- A much more holistic approach to
business regeneration and public
service transformation which can be
scaled up
- Smart, sustainable, inclusive growth
Continuing shift to knowledge based
sectors, particularly services
- Difficult to build clusters de novo,
better to build on established
strengths.
- Difficult to predict technological
advances, and incumbents are the
worst at predicting disruption
- Digitalization of services, further
service transformation and
behavioral change.
The Large-Scale Demonstrator approach – what do we mean by that?
Allan Mayo, Former Chair of the Expert Panel on Service Innovation in the EU

11. © 2014 IBM Corporation11
Fifth Session: The Way forward -Implications for European Service Innovation Policies
Loosely coupled innovation
systems in services
Manual services and social
challenges
Public organizations not
traditionally innovative –
changing demands
Systemic service-productivity
innovation:
Carried out in single
service firms
Weak support system – and
weak research foundation
Systemic innovations and the ecosystems approach as a means of tackling
societal challenges
Jon Sundbo, Professor, Roskilde University
Productivity example: number of employees needed to
create economic value of 1BDkr

12. © 2014 IBM Corporation12
Compare ESIC conference with Slush
startup event
Entrepreneurs pitching consumer and
business services to investors and partners.
Example: Inventor of a mobile connected
blood glucose measurement device
offers a subscription to a diabetes
children’s gamified compliance
enhancing service with alerts to parents
(including a cool-looking and feeling
device in subscription).
Approach is customer and business first:
User centric design, relevant ecosystem,
partners, service business models and
scalable operating models very present
from the origins.
Use of enabling technologies:
Built with consumable services for mobile
consumption
Role of local Agency for Innovation
In the background – event created by the
entrepreneurs themselves (framework
conditions in ESIC-language?)

13. © 2014 IBM Corporation13
For further information:
 Brown, Eric, https://www.youtube.com/watch?v=np1sJ08Q7lw, IBM
 Ernst and Young, http://www.ey.com/GL/en/Issues/Business-environment/Six-global-trends-shaping-the-
business-world
 Forbes, http://www.forbes.com/sites/rebeccabagley/2014/07/15/how-the-cloud-and-big-data-are-changing-
small-business/
 Gartner, http://www.gartner.com/technology/research/top-10-technology-trends
 IBM Institute for Business Value, The new age of ecosystems, http://www-
935.ibm.com/services/us/gbs/thoughtleadership/ecosystempartnering/
 McKinsey,
http://www.mckinsey.com/insights/business_technology/why_every_leader_should_care_about_digitizatio
n_and_disruptive_innovation
 McKinsey,
http://www.mckinsey.com/insights/business_technology/accelerating_the_digitization_of_business_proces
ses
 Moore, Geoffrey A, Escape Velocity, HarperCollings Publishers, New York
 PricewaterhouseCoopers, http://www.pwc.com/techforecast
 Spohrer,Jim, http://www.slideshare.net/spohrer, IBM
 Woods, Steven, Digital Body Language, New Year Publishing, Danville