Service output, innovation and productivity: A time-based conceptual framework

The paper adds to the literature on innovation and productivity in services in a three-fold way. First, it extends recent literature attempting to reconceptualise service output in terms of Lancasterian characteristics. Our focus is the analysis of inputs involving the use of client (customer) time in co-production and informational inputs, which may be produced by either the service provider or the client. In particular, we focus on those features that are associated with the use of information and communication technology (ICT) in service definition and delivery. Second, it models user choices in terms of the time-allocation between self-production, co-production and purchase as influenced by competences and time-saving preferences, and supplier choices as governed by opportunities to benefit from informational economies, cost saving arising from the stimulation of co-production and productivity increasing opportunities arising from the use of ICT. Third, it uses the conceptual framework to re-interpret the well-known theory of innovation in services, the Barras reverse product cycle model. Implications of the model for productivity are also considered. Finally, the model is used to interpret UK experience with e-government service: NHS Direct and Direct-Gov. The paper concludes with a research agenda for the scholars of innovation in services.