Opening up the contradiction of Open Services Innovation: The dark side of customer co-creation in services innovation

Carsten Lund Pedersen

Student thesis: Master thesis

Abstract

The field of innovation is in an evolutionary state of motion, as products constitute a smaller and smaller share of the economic pie, and as less is known about innovating services compared to products. In this new economic era, product innovation risks leading to a commodity trap of continuous innovation. Chesbrough’s theory of Open Services Innovation, which entails customer co-creation, seeks to meet this literary gap and help companies escape the commodity trap. The present master thesis addresses the issue of the potential contradiction between Open Services Innovation’s objective of escaping the commodity trap and the realities of customer co-creation. Furthermore, the thesis attempts to propose a solution based on a deep understanding of this contradiction. The intention is to question the field’s positive assumptions of co-creation, understand the contradiction, and propose a solution that can overcome the tension. The methodological foundation for pursuing this purpose is a theoretical study consisting of a meta-theoretical triangulation. A theoretical study has been chosen due to a gap in research, and as it is the most suitable for answering the research question. The contradiction that co-creation poses to Open Services Innovation is understood by viewing it through the lenses of a meta-theoretical triangulation; ironically, this means that Chesbrough’s own medicine of Open Innovation is prescribed to himself, as the theory of Open Services Innovation is opened up to outside sources. The findings show that all three meta-theoretical perspectives argue that the co-creation element of Open Services Innovation may lead to incremental and sustaining innovation. Consequently, this may exacerbate the commodity trap, which Open Services Innovation should be the remedy for; thus, co-creation poses a potential contradiction to Open Services Innovation. The contradiction can partially be explained by the simplified conceptualization that Chesbrough gives of the commodity trap, where the focus is on exogenous, and not endogenous, causations. To overcome the contradiction, it is suggested that Open Services Innovation should be adjusted in accordance with a new hybrid perspective combining the three meta-theoretical perspectives.

EducationsMSocSc in Service Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2012
Number of pages83