Quiz: test your knowledge
Innovation: from technologies to services
Characteristics of disruptive innovation
Winning alchemy from antiquity to now
Web searches recommandation
Innovation: from technologies to services
Characteristics of disruptive innovation
Winning alchemy from antiquity to now
Web searches recommandation
Introduction
For young people under 20 years, the
continuous interconnection of smartphones with all sorts of new services is exalting,
but certainly not surprising. However, new services have surpassed our
imagination, leaving us a feeling of a break with the
twentieth century. Many start-ups have been created in the digital age
for establishing businesses on really new offers. They intended to change the
situation. Some of them have succeeded in and brought disruptive innovations.
I was looking for a book or a tutorial
presenting a wide range of such success stories of disruptive innovations in
services areas. I have not found any, hence the idea of this book. The issue
is addressed through more than 100 case studies, including 50 outstanding
success stories. This empiric approach makes the book accessible and attractive
to a wide audience, including non-specialists in information technologies and
economics.
This book considers successes coming from
various sectors of activity in order to address the innovation question in a
global way beyond a given sector. It reviews disruptive innovations in the
following fields: employment, finance, information, tourism, commerce, mail, urban
transport, social networks, and media. Excepted the first chapter, which
presents the foundations of services and disruptive innovations, each chapter is
dedicated to a given sector of activity in order to show how a service has been
transformed over time and been the subject of successive success stories.
This book gives us the opportunity to tell
stories of the Web and the mobile age, and even before! It is looking for
alchemies that have led to the development of present and past successful
disruptive innovations. We began by considering digital innovations in the
Internet age. In analyzing their foundations, we were going back in time. What
was not our surprise to find that during the last five centuries many
innovations in services have transformed everyday life! Some
stories seem to repeat themselves over time.
Behind all these innovations, we have found
ingenious creators. These entrepreneurs and leaders have often founded what we
now call start-ups. This book considers their profile. Innovations are often
provided by people with a scientific, enterprising and inventive profile.
Inserts titled "Serial Entrepreneurs" present for each domain the
profile of those who have brought disruptive innovations. And at the end of the
chapters we give the floor to one of them.
Finally, a "know more" section will
guide your research on the Web and tell you how to find free sources of
information.
This book brings another view on innovation.
It combines economic, strategic, historical, technological and human
perspectives. It searches winning alchemies and finds great innovations in
services around supply and demand cross-matching places, information search, remote
payment, distant selling, travel organization, messaging, vehicle sharing,
networking and social media.
Quiz
What is your knowledge level about service
innovation? Whether you are a specialist or a beginner, discover it by
answering this quiz!
# 1 Geeks before time - They were the first customers of telegraphic sport news and the first customers of automated bank deposits services. Who were they?
1) Bookmakers
- 2) Pimps - 3) Traders
# 2 The first
European service - It was deployed successively in the
Egyptian, Persian, Roman, Chinese, Arab and Mongol empires, before being the
first European service whose headquarters was based in Brussels. What is this
service?
1) Vehicle Rental - 2) Transport - 3) Mail
# 3 It was
almost a Visa card - The history of money transfer and payment
services, whether by post, credit cards, internet or mobile phone, is marked by
remarkable innovations. What was the first payment card?
1) Air travel card - 2) Charga-plate - 3) Diners
club - 4) American Express
# 4 An innovator
of services par excellence! Surgeon, he created the first place to match
the supply and demand of jobs. It published a self-medication manual, created a
free care service and set up a bank loan service for the poor. He founded the
1st main French newspaper. It was in the 17th century. Better known as a literary
prize, what’s his name?
1) Goncourt - 2) Medicis - 3) Renaudot
# 5 The news -
"It's 8 pm! Sunny day on France, alert, stormy weather for tomorrow -
opening of a new transport line - results of the football championship - the CAC
40 exceeds the threshold of 4,000 points - according to AFP ... ". Several
information services provide inputs to this evening rendezvous; how many do you
think?
# 6 Weather forecasts
- Weather forecasts are now broadcast on all kinds of media: radio,
television, press, Web, mobile phone. The daily press began to publish weather forecasts
150 years ago! Do you know the economic factors, the motivations that led and
supported the development of this service? For whom was this service of great economic
value at the beginning?
1) Farmers - 2) Ship-owners - 3) Mountaineers
# 7 1st
bus city routes - The first urban transport service on fixed
lines or routes, with a flat rate and regular rotations, appeared with the
trams in the nineteenth century.
1) True - 2) False
# 8 Is the
stock market up? The stock quotes were among the first
information communicated in real time in the 1850s by telegraph. Reuter was one
of the pioneers of this innovation. He had a renowned competitor of which he had
been the collaborator. Who was he?
1) Havas- 2) Cook
# 9 You have
5 minutes in advance. The time of clocks, telephones and
computers has been automatically synchronized over the past two decades by satellites
and computer networks. Yesterday this service was provided by the radio, the speaking
clock, the clocks of stations and churches. Accessible everywhere this service
has become a convenience. Do you know why there was a time when, passing the
threshold of a French train station, the travelers went back in time for five
minutes?
1) Due to the systematic delay of trains - 2)
So that travelers can get used to the time accuracy - 3) Due to the inaccuracy of the clocks
# 10 Where
to go on holiday this summer? Tourism information, travel recommendations
and booking facilities are provided by travel guides such as the Michelin guide
as well as by online travel agency services such as TripAdvisor. When was the
first travel guide published?
1) When the first paid holidays were created-
2) When the first car trips appeared - 3) By the first travel agencies - 4) In
the Renaissance with the vogue of the European Grand Tour - 5) For Pilgrimages
# 11 Who is
Jack Dorsay? This is an American Golden Boy. He created Square, a credit card reader
for mobile phones. This company was listed on the stock market in 2015. J.
Dorsay had previously founded a well-known Internet service; is it?
1) Facebook - 2) Google - 3) Twitter - 4)
Amazon
# 12 Design - Who
proposed the following universe of services in 1994? "Think of it like
visiting the world of the wizard of OZ. You can go where you want and find what
you want to know in seconds. Visit the buildings, there is always something inside.
Just click on a building and a window opens, giving you more to see and do. As
in the physical world where you live, you will find people, businesses, a
meeting place, recreation areas, libraries, classrooms, a mailbox and a post
office. "
1) Microsoft - 2) Apple -3) AOL
# 13 Celebrities - Could you give five
names of people or companies that are behind the success of well-known service
innovations?
# 14
Prophecy - Compuserve was advertising “Welcome to Someday - One day in
the comfort of your home, you can shop and banking electronically, instantly
read the news , Analyze the stock quotes that interest you, send e-mails across
the country, play bridge with three unknowns in LA, Chicago and Dallas. One day
is now with the Compuserve information service ... the cost is only 5 dollars
per hour. In what year was this advertisement published?
Answers
# 1 - Bookmakers and pimps quickly realized
the advantage of bank deposit services without tellers. # 2 – The mail was the
first European service whose headquarters were in Brussels from the 17th
century. # 3 - The Charga-plate is a payment card that appeared in the United
States in the 1920s. # 4 -T. Renaudot was an innovator of services par
excellence. # 5 - This excerpt from the 20-hour news is based on at least five
sources of information: the time, weather forecasts, stock quotation, general
and thematic news. # 6 - At the beginning, the Weather Service had an economic
value for ship-owners. # 7 - City transport routes appeared first at Paris with
the “coach at 5 sols” in 1650. # 8 - Reuter was a competitor and former
collaborator of Havas, pioneer in stock market communication. # 9 – In France, the clocks located outside
the rail stations and on the station platforms had five minutes of delay, because
users were not accustomed to time accuracy. # 10 - Travel guides appear in the
16th century for pilgrimages. # 11 Jack Dorsey is Mr. Twitter. # 12- This was
the eWorld service co-produced by
Apple and AOL in 1994. # 13 – You will find the profile of main actors in
services innovations, such as Blaise Pascal, Benjamin Franklin, Jeff Bezos,
Marc Zuckerberg and others in the "Serial Entrepreneurs" inserts of
this book. # 14 - This Compuserve advertising dates from 1982.
If you have less than 5 correct answers: no
worries, the questions are difficult! A new field of knowledge is open to you.
At the end of this book, you will know more than many professionals of the
field!
If you have 5 or more good answers: would
you not be already a specialist in
innovation and service economy? Marketer, engineer, start-up creator,
consultant, MBA student or investor, this book will allow you to improve your
knowledge on this subject with cross perspectives.
If you have made a no-fault, contact me
at:
innovation50success@gmail.com!
1
Service
innovation
Over time
Innovation:
from technologies to services
Well-known technological innovations!
“The Innovation”, I see what you are talking
about; that is a technological invention offering new possibilities, that becomes
available for users or customers. Politicians see the innovation as a lever for
bouncing the economy and face globalization. President Barack Obama said in
2010: "The key to our success - as it has always been - will be to compete
by developing new products, by generating new industries by maintaining our
role as the world’s engine of scientific discovery and technological
innovation. It’s absolutely essential to our future”. The French government
launched the Innovation 2030 commission. Chinese President Xi Jinping has also considered
innovation as a factor of change.
Each of us can mention several technological
innovations that have transformed lifestyles: for instance the invention of
motorized transports, the creation of electrical and electronic devices ... It
is quite easy to imagine these past technological innovations from photos or
illustrations. We have cultural references that allow us to know approximately
their date of creation. These innovations are stored in museums. Sometimes we
can see them in movies. The Ford T, the first mass-produced car, was the car of
Laurel and Hardy in the 1920s. Emile Zola's novel “La Bête Humaine”, published
in 1890, and its cinematographic adaptations, make us live the time of steam trains.
The jets appear at the end of the Second World War, a little later in our
imagination. Tintin, the hero of comic strip, walks on the Moon fifteen years
before Armstrong.
What do we mean by "service"?
A "service" is more difficult to
define, it is immaterial. In everyday language, this refers to expressions
like: serve, provided service, self-service. This also refers to state services
around spying with the famous secret
services and other intelligence services. Large companies and administrations
have their own internal service departments in charge of centralized functions
such as billing and purchasing processes. The development of service activities
in the context of the digital economy is also the subject of political debates.
Who speaks best
about this topic?
The subject is studied since antiquity. Four
centuries before Christ, Aristotle in the Topics (La Morale) questions the
value of services in business relations: "The extent or value of this
service must therefore be assessed on the utility it has derived from it”. Currently,
service activities are considered in the fields of economics, consulting, IT
and even marketing. A multidisciplinary Science of Services was launched in
2005 without really succeeding in imposing itself. It aimed, among other
things, to encourage business and technological double competences.
To the question: What are the main service activities? The economist will list the sectors of finance, tourism, transport, health, public services. The consulting company will set up a pole of experts on each of these domains focused on growth prospects. The IT specialist will talk about the realization of billing and booking services; it will propose different solutions to improve the quality of service; the web agency will consider the dematerialization of customer relations as well as online sales. Marketing will emphasize the simplification of the services uses, the improvement of customer experiences.
Services innovation,
what is it then?
That’s innovation referring to a service
offer. It is not very clear! The juxtaposition of these two abstractions can
make some people grimace.
The innovation of services concerns, on the
one hand, the invention of new services and, on the other, the invention of
innovative processes and systems for operating services.
Unlike technological innovations, it is
difficult to visualize them. They are, however, occasionally mentioned in
narratives. For example, courier services were evoked in antiquity by the Greek
strategist Xenophon, and most recently in the writings of Marco Polo or in
novels of the eighteenth century. The telegraph services and the carriage of
stagecoaches are present in Western movies. The introduction of electricity in
the French lands in the middle of the 1930s has marked the minds. The same will
apply to the creation of Web services. Google, Facebook and Amazon will be durably
associated at the beginning of the 21th century. Apart from a few known
examples, disruptive innovations in services that have operated radical breaks
and constitute real success stories are not well known, and that is true, curiously,
in the community developing innovations too.
Recently, great successes in this field are
often American. This is no surprising, given the role played by the United
States in last decades in computing and Internet domains. Should we be
surprised that it was the same, 50 years or a century before? The dominant role
played by the United States in the innovation of services since the 1850s gives
new insights on recent successes.
Over the past decade, the topic of service
innovation has been the subject of political attention in the Anglo-Saxon and
Northern European countries, which see the service economy as a source of
growth. There is less interest in France where the idea of innovation remains
more closely associated with technological productions. These successes,
however, are very real and have led to major breaks. Google, Amazon, Wikipedia
are perfect illustrations.
In search of
winning alchemy!
The Web, an
unprecedented observation field
The Web is particularly interesting to
observe because it has made possible, in less than twenty years, the emergence
of new services, such as social networks, search engines and e-commerce. In
addition, the Web has reinvented a wide range of services in many industries: travel,
vehicle sharing, remote payment, information retrieval, advertising, communications,
news, weather, entertainment.
Due to its very rapid development, the Web
facilitates the observation of the dynamics of innovation successes, whether at
strategic, organizational, operational, technological or financial level.
Unprecedented
service expansion
In 2016, about 20 years after its appearance,
the Internet has 3.33 billion users for a world’s population of 7.4 billion.
Several services are used each month by more than a billion people (what is
called unique visitors per month). The Google search engine was the first, in
2011, to exceed one billion users. The confidentiality of the number of Google
users has since been kept confidential. In 2016, it should approach 1.5 billion
people, knowing that Facebook had 1.59 billion unique users per month. Google,
it's also 12 billion questions per month and the indexing of one billion of
billions of pages. The Gmail e-mail service in turn reached the one billion
users per month in 2016, surpassed by Youtube which had 1.3 billion. Google,
Gmail and YouTube are the main services provided by Alphabet Company, society created
by the founders of Google. Yahoo, the best known aggregator of web services, despite
its 800 million users in 2013, has a declining growth.
The Web, a mine
of information
Beyond these recent success stories, it was
until now difficult to be well informed of the services evolutions over the past
centuries and to analyze their disruptive innovations; information on this
subject was scattered. Relevant sources of information include: advertisements
highlighting service innovation, articles relating an extraordinary popularity
of a new service, bibliographies of successful entrepreneurs in service
domains, purchase of innovative companies for a record amount, publications on
case studies, patents and letters patent guaranteeing the exclusivity to
operate a given service.
The most part of this information based on
old documents has been digitized. More and more digitized documents are now
freely available in online archival collections. They are accessible via the
Web especially with Wikipedia, Google and some specialized sites mentioned
later.
Identification of disruptive innovation
To be able to find such successes, it is not
sufficient to have access to the mentioned relevant sources of information; it
is also necessary to be able to recognize disruptions. For this, the sought
innovative characteristics must be identified.
Many of the services reported in this book
relate to intermediation, information retrieval, cross-matching of offers and
demands.
The success stories presented in this book
concern disruptive innovations. The creation of a truly new service is obviously
a disruptive factor, but it is not the only one. Most of the time, the
considered services have existed in the past, sometimes in antiquity, in a more
or less successful and close forms. For example, e-mail and e-commerce give a
new dimension to the existing services of mail and mail order, reinventing
them. The break may consist of expanding access to an existing service. It can
also be related to a radical change in the operational modes, in the
lifestyles, in the business model.
The determination
of the first service apparition
The disruptive innovation that is most easily
discerned is the creation of a new service that did not exist before. The
exercise consists in determining when the service appeared and to check that
there was no such offer before, in any form whatsoever. In this context, the service
is characterized by the creation of new possibilities. For example, it can be
the first facilities or services to organize trips, to supply home electricity,
the first weather forecasting publications. Nowadays, this type of novelty is
illustrated by Internet search engines such as Google and by the creation of a
gigantic universal information base in free access.
Expanding
accessibility to a given service
A given service can also be reserved for some
privileged people, be available only in certain places; its use may require a
high qualification or have a prohibitive cost. An innovation can consist in
this case to remove some of these constraints in order to make the service
accessible to a larger population. Innovation can be based on the inventive use
of new technologies in service providing and operational processes. For
example, until the 1970s, investment on the stock exchange was transacted
through brokers and was not viable for small transactions. Charles R. Schwab,
whose brokerage firm is now internationally renowned and well known in US, opened
the market to non-specialists by relying on legislative change and new
technologies. It has industrialized the system and eliminated fixed
commissions. In the Renaissance, the Grand Tour, which consisted of a cultural
journey across Europe, was the privilege of wealthy English aristocrats. The
Cook agency will make it accessible from the 1850s to high-middle classes and
women wishing to travel alone. Innovation can also include the accessibility of
a service in new locations, such as the mobile phone with regard to the wired
telephone; another example is the mail order that makes it possible to buy any
type of products in remote areas.
A new
business model
Innovation can focus on the business models. A
service, once created, must be operated. Innovation can consist in creating a
business model that extends its accessibility while operating it profitably.
The creation of an innovative business model will anticipate the emergence of
new performance criteria and, to a certain way, ignore the existing business
criteria. In their first phase of development, such innovations do not appear -
at first sight - to produce a considerable business compared to the usual
performance metrics. They are often guided by a visionary strategy. A recent
example is to consider the number of customers as a value in itself,
independently or to the detriment of profits. This model at first glance a bit
utopian has shown its relevance and effectiveness repeatedly, through free e-mail,
social networks and other audience sites. PayPal is a good example; it was
aimed to create a new predominant global monetary system ; its main objective
was to reach the 500 million customers as soon as possible, even if it was
necessary to purchase the customers' subscription, offering up to twenty
dollars to accelerate it.
An innovative business model can thus allow
new players to penetrate a market and introduce breaks in it with the
appearance or disappearance of intermediaries. It transforms the value chain.
When a new player enters the market and becomes the leader of the field, the
success story is all the more interesting.
Innovation
spread across different sectors
Some success stories are reinforced by the
fact that an innovation impacts simultaneously or successively several sectors
of activity and therefore has a significant impact on society. Mail companies
in the eighteenth century simultaneously developed, in addition to mail
delivery, the transport of people, the management of relays providing horses,
carriages and accommodation facilities. The relays became an actor in news
transmission: the newspaper was consulted in this place; coach-pooling offers were
displayed. Innovation can be spread over time; Thus, American Express will
successively address the logistics, mail, travel and finance sectors. Later,
American Express will be a major player in the credit card business which will
in turn impact distribution, transportation. Western Union was a telegraph
operator in the 1850s and then a stock ticker providing brokerage information
for the New York Stock Exchange in the 1860s. In 1870 it launched a weather
service and a currency transfer service before other banking services. Innovation
seems in the DNA of some entrepreneurs and companies!
Over time!
The following chronological view of the apparition
of service innovations underlines the dynamics of progress in services over the
centuries. Imagine the services which appeared at a given time! First, it must
be noted that services innovations did not exclusively appear in recent years.
Several periods since the sixteenth century have been favorable to their development,
and some services have appeared from antiquity.
From
Antiquity to the 15th Century
It was the courier services that mainly
attracted our attention during this period. They rely on the establishment of
relay networks. At this time, the courier was mainly created for the attention
of the State administration, and took fairly rarely a public dimension. Several
writers have reported extensive deployments. During this period, mails were
also used to transmit remote payment orders.
In the
sixteenth and seventeenth centuries, services took shape
In London in 1600, several thousands of boatmen
provided a service of transport along the Thames. Although operated by
independents, the service has been organized for a hundred years by the Waterman
Company. This corporation regulates rates, boats, apprenticeship training. During
this period, documents are beginning to be published to provide information, especially
catalogs of products for sale, travel guides, newspapers and address
directories. As an example, in 1598, the book Survey of London provides useful
information on the location of craftsmen, traders and facilities in London. At
the same time, the organization of postal services is improving everywhere in
Europe.
In Paris, in the middle of the 17th century,
an office of addresses and encounters makes it possible to compare offers and
demands for services or goods. Coaches and sedan chairs for rent are posted in
the streets waiting for customers. It is also possible to use public transport
every seven minutes on fixed roads with the coaches at 5 sols.
From 1700 to
1840, extension of the creation of new services
From the middle of the 18th century, the offer
of services was expanded. Insurances, mail-order services and money transfers
were created. First information services dedicated to economic news and stock
quotes are founded.
With the telegraphic
era, the United States come into play
From the 1840s, railway networks, telegraphs
and the popularization of mail services stimulated the creation of services. In
fifty years, many elements of the current offer are being set up (tourism
agency, hourly service, traveler's checks, weather service, etc.). The
expansion of the United States is favorable to the deployment of service
innovations.
From 1900 to
1990, consumer services
The United States is becoming a leader in
service innovation. The automobile and the wages payment on a monthly basis will
affect consumption patterns. Payment facilities and credit services will grow during
this period. Other innovations appear with the idea of self-service. The power
supply, telecommunication, radio and television, as well as information
technologies offer new opportunities.
Since 1995,
the era of the Web and mobile phones
In the space of twenty years, the Web era has
generated numerous innovations in services, including messaging, search
engines, linking services, e-commerce, products sharing. These innovations are
based on new operating procedures. Innovative business models expand the
service accessibility create new offerings.
Internet searches to find out more
With simple Google
search find the following Expressions with and without quotes:
- “service(s) science“, “disruptive innovation“, “innovation in services“,
- “1 billion unique visitors by month“, “worlwide comscore“
- "Innovation in services” Economics DTI occasional paper n°9 June 2007
- “The Smart Guide to Service Innovation“, “European and National Strategies for Service Innovation“
- Politics Aristotle (book 1 with ctrl F search
“service”)
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