ABSTRACT
Although service innovation has long been considered crucial for economic development,
systematic and comparable empirical evidence elaborating the activities and effects of
service innovation, particularly from a small- and medium-sized enterprise (SME)
perspective, is limited. To fill this research gap, this study focused on the innovative
behaviors of SMEs in service industries to clarify the relationships amongst the patterns,
outcomes, and impact of information technology (IT) use. In this study, 103 SMEs in the
tourism and food service sectors receiving sponsorship from the Taiwanese government
between 2006 and 2011 were analyzed. The results indicated that service innovation
projects initiated by SMEs tend to implemented using a multifaceted approach with the
goal of accessing new markets and new customers. The short-term outcomes of these
service innovation projects were reflected mainly in revenue and new product and service
offerings. In addition, IT was determined to be crucial in facilitating service innovation, but
not a necessity. Finally, to align with the nature of the service industry and the industry life
cycle, SME-based service innovation tended to focus on commercial and softer aspects,
which reflected the key differences between firms of manufacturing sectors and SMEs in
typical service sectors in terms of research and development patterns and focus.
 
ABSTRACTAlthough service innovation has long been considered crucial for economic development,systematic and comparable empirical evidence elaborating the activities and effects ofservice innovation, particularly from a small- and medium-sized enterprise (SME)perspective, is limited. To fill this research gap, this study focused on the innovativebehaviors of SMEs in service industries to clarify the relationships amongst the patterns,outcomes, and impact of information technology (IT) use. In this study, 103 SMEs in thetourism and food service sectors receiving sponsorship from the Taiwanese governmentbetween 2006 and 2011 were analyzed. The results indicated that service innovationprojects initiated by SMEs tend to implemented using a multifaceted approach with thegoal of accessing new markets and new customers. The short-term outcomes of theseservice innovation projects were reflected mainly in revenue and new product and serviceofferings. In addition, IT was determined to be crucial in facilitating service innovation, butnot a necessity. Finally, to align with the nature of the service industry and the industry lifecycle, SME-based service innovation tended to focus on commercial and softer aspects,which reflected the key differences between firms of manufacturing sectors and SMEs intypical service sectors in terms of research and development patterns and focus.
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