Exploring product and service innovation similarities and differences

This paper aims to provide an initial step towards a synthesis of new service and new product development research. Using a baseline model of innovation, applicable to innovation in general, we hypothesize differential context effects between new service and product development in order to better understand their differences and similarities. We argue that R&D strength is more important for new product than service development, while a company's willingness to cannibalize organizational routines and prior investments is more important in the case of new service than new product development. The model and hypotheses are tested using data from 217 service-based and 105 product-based companies in The Netherlands. The results provide initial support for the integrating perspective. Directions for future research are discussed.