Functional approach and service innovation logics: developing a non-technicist analysis of hospital service evolution

Abstract

Recent research upon service innovation has attempted to integrate two theoretical streams: service economy and evolutionary economy. By incorporating elements from service economy, especially the service functional logics approach, notions such as variety creation, selection environment, innovation trajectories and systemic approach can be enriched. This allows not only a better understanding of service innovation, but of the innovation process in general. In this context, the purpose of this paper is to present the application of a conceptual framework, stemming from this theoretical convergence, to innovation in hospitals. Initially, we present a literature review introducing the fundamentals of the framework. Then, we describe its application to hospital services and carry out the analysis of the selected cases. Innovations have been identified through unstructured interviews with executives from eight hospitals in the years 2002, 2004 and 2005. Findings show that hospital service evolution derives from the simultaneous action of various determinants in the innovations. They derive from distinct functional operations during the providing of the service. Such diversity of determinants affecting the innovation process contrasts with the technological determinism underlying evolutionary models applied in the analysis of service innovation. By incorporating elements from service economy such as functional logics, evolutionary concepts can be revamped, widening its analytical potential to cope with the heterogeneity and specificities from service industries.