Tor Helge Aas,  Ph.D.,  Associate  Professor,  School  of  Business  and  Law,  University  of  Agder,  Gimlemoen  19, 4630 Kristiansand,  Norway,  and  Senior  Researcher,  Agderforskning  AS,  Gimlemoen  19,  4630  Kristiansand,  Norway,  e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it..

Abstract

Most empirical research investgatng open innovaton has focused on the development of new physical products in manufacturing industries, whereas open service innovaton has not been researched correspondingly. Services have some characteristcs that distnguish them from physical products, which may affect the types of open innovaton practce utlised during service innovaton processes. Tourism services comprise a subset of services that is partcularly distant from tangible products. Therefore, the exploraton of how tourism frms utlise different types of open innovaton practce offers a valuable opportunity to learn about the nature of open service innovaton practces. Thus, this paper addresses the following research queston: what types of open innovaton practce are utlised during the development of new tourism services? A qualitatve case study approach was used to answer the research queston. The fndings suggest that pecuniary and non-pecuniary inflows of knowledge are utlised during service innovaton processes in tourism. However, the stage of the innovaton process at which inflows of knowledge are utlised varies systematcally with respect to whether the innovaton is perceived to be incremental or more radical. The fndings also indicate that tourism frms reveal knowledge to other tourism frms in non-pecuniary outbound open innovaton processes. However, no example of a pecuniary outbound open innovaton practce was identfed in this study. Implicatons for management and further research are discussed in the paper.

Keywords: service innovation, new service development, open innovation, tourism management.

Introduction

Innovaton is a critcal factor for the generaton of fnancial performance and compettve advantage in manufacturing (Adner & Kapoor, 2010) and service (Aas & Pedersen, 2010) frms. Therefore, the search for appropriate practces and strategies to organise and manage innovaton actvites is the focus of an ongoing stream of research. In a broad sense, empirical results of this research have confrmed that the characteristcs of service innovaton differ from those of product innovaton (Droege, Hildebrand & Forcada, 2009). Research results have also suggested that innovaton practces differ among service subsectors (Kuester, Schuhmacher, Gast & Worgul, 2013). Sectorial differences relate to the conceptual complexity of innovaton (den Hertog, 2000), the innovaton processes (de Brentani, 2001), and the resources needed to carry out these processes (Nijssen, Hillebrand, Vermeulen & Kemp, 2006). The observed differences are ofen explained by the fact that services have, to varying degrees, specifc characteristcs such as intangibility, heterogeneity, inseparability, perishability (Zeithaml, Parasuraman & Berry, 1985), and co-creaton of value (Vargo & Lusch, 2004), which in turn affect innovaton practces.

In recent years, the potental of involving external actors in frms' innovaton processes, ofen referred to as 'open innovaton', has received much atenton from researchers and business managers (Dahlander & Gann, 2010; Huizingh, 2011). To date, however, most open innovaton research has focused on manufacturing frms developing new physical products; open innovaton practces of frms developing new services have not been researched correspondingly (e.g., den Hertog, van der Aa & de Jong, 2010; Huizingh, 2011; Mina, Bascavusoglu-Moreau & Hughes, 2014; West & Bogers, 2014). Thus, our knowledge of open service innovaton practces is limited (Huizingh, 2011). This literature gap is concerning, as service industries in most developed countries account for greater proportons of GDP and employment than do manufacturing industries (Spohrer & Maglio, 2008), and due to the importance of innovaton to frm-level success in service industries (Evangelista & Vezzani, 2010).

To contribute to flling this literature gap related to open service innovaton, Chesbrough recently published a book (Chesbrough, 2011a) and a series of conceptual artcles (e.g., Chesbrough, 2011b) in which he discussed the relevance of open innovaton in services. Using success stories from product innovaton, he argued conceptually why open innovaton may be benefcial also for innovaton in services, and he concluded that 'open innovaton accelerates and deepens services innovaton' (Chesbrough, 2011b, p. 15). Empirical studies investgatng Chesbrough's (2011b) propositon remain scarce, but a few exist. Some of these studies focus on partcular subsectors, such as business services (e.g., Mina et al., 2014) and banking services (e.g., Gianiodis, Etlie & Urbina, 2014), whereas others focus on the service sector as a whole (e.g., Menton, 2011). On the whole, the results of these empirical studies support Chesbrough's (2011b) propositon.

Despite these signifcant contributons, open service innovaton remains a relatvely unexplored area of research (Mina et al., 2014). In partcular, more empirical insight is needed to understand more deeply the types of open innovaton processes used during new service development. To contribute to flling this literature gap, we performed an in-depth qualitatve study on a subset of services that is partcularly distant from tangible products: tourism services (e.g., Hjalager, 2010). These services are arguably characterised by high degrees of intangibility, inseparability, perishability, and heterogeneity (Zeithaml et al., 1985), in part because tourism frms ofen add experiental components to their core offerings in the form of 'comprehensive living adventures' (Stamboulis & Skayannis, 2003, p. 38). Thus, this qualitatve examinaton of how tourism frms exploit different types of open innovaton practce when they develop new services will provide valuable new insight on the broader topic of open service innovaton. This study examined the following research queston: what types of open innovaton practce are utlised during the development of new tourism services?

The artcle is structured as follows. In the next secton, we review the (product) innovaton management literature on different types of open innovaton practce. Based on the fndings of previous empirical studies, service innovaton in tourism is then distnguished from product innovaton to (theoretcally) suggest why such types of open innovaton practce may, or may not, be relevant for service innovaton actvites in tourism. Thereafer, we describe the case study research method. In the following secton, we report the research fndings, describing the types of open innovaton practce that were utlised during service innovaton processes in our cases. The paper ends with a discussion of practcal and theoretcal implicatons and suggestons for further research.

Theory

Types of open innovaton

The term 'open innovaton' refers to 'the use of purposive inflows and outlows of knowledge to accelerate internal innovaton, and to expand the markets for external use of innovaton, respectvely' (Chesbrough, Vanhaverbeke & West, 2006, p. 1). Chesbrough (2003, p. 24) argues that 'open innovaton is a paradigm that assumes that frms can and should use external ideas as well as internal ideas, and internal and external paths to market, as frms look to advance their technology.' The frst mechanism in this defniton, i.e. the use of inflows of knowledge, is ofen called 'inbound' open innovaton, whereas the second mechanism, i.e. the use of outlows of knowledge, is ofen called 'outbound' open innovaton (Huizingh, 2011). Based on a review of the literature, Dahlander and Gann (2010) also distnguish between pecuniary and non-pecuniary types, and consequently suggest four types of open innovaton: 1) non-pecuniary inbound open innovaton (sourcing), 2) pecuniary inbound open innovaton (acquiring), 3) non-pecuniary outbound open innovaton (revealing), and 4) pecuniary outbound open innovaton (selling).

The research literature discusses benefts and disadvantages of these four types of open innovaton. For example, the ability to buy external ideas or expertse (inbound pecuniary open innovaton) has many benefts, as it may provide a frm with valuable resources that it would not have been able to obtain in other ways (Dahlander & Gann, 2010). Research indicates, however, that the acquisiton of knowledge that is too close to what the frm already knows may reduce the positve effects (Dahlander & Gann, 2010). Inbound non-pecuniary open innovaton may also be benefcial, as it provides opportunites for frms to beneft from the ideas of outsiders to generate new products or services (Dahlander & Gann, 2010). As there are cognitve limits to how much individuals working within frms can understand, however, frms may risk relying too much on external sources of innovaton, which may be a disadvantage (Laursen & Salter, 2004). Furthermore, outbound pecuniary open innovaton may have advantages, as frms can beneft more effectvely from their investments in R&D (Chesbrough et al., 2006), but a disadvantage is that signifcant transacton costs are ofen involved (Gambardella, Giuri, & Luzzi, 2007). Outbound non-pecuniary open innovaton enables frms to build upon each other's work and may result in increased innovatveness (Nuvolari, 2004), but the obvious disadvantage of revealing knowledge and ideas renders the capturing of benefts difcult (Helfat, 2006).

Recent literature reviews (Dahlander & Gann, 2010; Huizingh, 2011; West & Bogers, 2014), however, reveal that the open innovaton research in which these advantages and disadvantages are discussed has investgated a limited sample of industries and sectors. According to a review by Aas and Pedersen (2016), research in this area has focused predominantly on the sofware, telecommunicatons, chemical, electronics/semiconductors, pharmaceutcal, fast-moving consumer goods, aerospace, bioscience, sports goods, and apparel sectors. Thus, the four-type framework of Dahlander and Gann (2010) is based to a large extent on investgatons of physical product innovaton, and its relevance for new service development remains uncertain.

The specifcites of service innovaton in tourism

Some scholars have argued that innovaton management research in general has been concerned primarily with the management of physical product innovaton processes (e.g., Droege et al., 2009), and not the management of service innovaton processes (Drejer, 2004; Adams, Bessant & Phelps, 2006; Nijssen et al., 2006; Spohrer, 2008), and that this skewed focus has resulted in the status that 'current theory and understanding of the strategies and tactcs for developing new services is inadequate' (Menor & Roth, 2007, p. 825). Although this claim remains true to a certain degree, scholars are increasingly examining the characteristcs of service innovaton management, and how they differ from those of product innovaton management (Johne & Storey, 1998; Johnson, Menor, Roth & Chase, 2000; Menor, Tatkonda & Sampson, 2002).

A main topic in this research stream is the types of resources or capabilites frms need to succeed with new service development (e.g., den Hertog et al., 2010). Researchers have found, for example, that the involvement of frontline employees (Lages & Piercy, 2012) and internal experts (Hydle, Aas & Breunig, 2014), as well as the establishment of cross-functonal teams, is ofen associated with successful implementaton of service innovaton projects (e.g., Droege et al., 2009). The research results also suggest that relevant training and assignment of innovatve roles are critcal success factors (de Jong & Vermeulen, 2003).

The extant service innovaton literature also suggests that external resources are important in service innovaton processes (Williams & Shaw, 2011). In partcular, the involvement of (prospectve) customers is ofen highlighted as an important source of innovatve ideas and co-creators of new services (e.g., Carbonell, Rodríguez-Escudero & Pujari, 2012; Gustafsson, Kristensson & Witell, 2012). A few studies also highlight the importance of other types of external actor. Tsou (2012), for example, suggested that frms need competence for collaboraton with external frms to succeed with service innovaton. Research has also shown that service frms rarely carry out traditonal R&D internally (e.g., Meyer, 2010), although the implementaton of R&D-embodied technology is ofen a source of innovaton in services, and in tourism services in partcular (e.g., Orfla-Sintes et al., 2005).

Although the importance of external collaboraton has been discussed to some degree in the service innovaton literature, explicit exploraton of the types of open innovaton practce, according to Dahlander and Gann (2010)'s framework, that are utlised in new service development processes is largely missing (Aas & Pedersen, 2016). We argue that the empirical exploraton of open innovaton practces related to the development of new tourism services consttutes a partcularly relevant context with which to build knowledge in this area, as these services represent a subset of services far removed from tangible products (Stamboulis & Skayannis, 2003; Zeithaml et al., 1985; Zomerdijk & Voss, 2011).

In a broad sense, innovaton in the tourism sector may be defned as 'the generaton, acceptance and implementaton of new ideas, processes, products or services' (Hall & Williams, 2008, p. 5). As noted by several authors, however, distncton among process, product, and service innovaton in service industries can be difcult because 'new services ofen go together with new paterns of distributon, client interacton, quality control and assurance, etc.' (de Jong, Bruins, Dolfsma & Meijgaard, 2003, p. 17). Therefore, 'service innovaton' is ofen used as a generic term referring to many different types of innovaton in service frms. In this paper, we thus base our exploraton on a broad defniton of service innovaton suggested by van Ark, Broersma and den Hertog (2003, p. 16): 'a new or considerably changed service concept, client interacton channel, service delivery system or technological concept that individually, but most likely in combinaton, leads to one or more (re)new(ed) service functons that are new to the frm and do change the service/good offered on the market and do require structurally new technological, human or organisatonal capabilites of the service organisaton.'

The specifc characteristcs of services in general, and tourism services in partcular, may be expected to affect the types of open innovaton practce that are relevant when new (tourism) services are developed. As indicated by extant research (e.g., Buhalis, 2000; Carbonell et al., 2012; Hall & Williams, 2008), the inseparable nature of these services may, for example, imply that inbound open innovaton practces in which knowledge from customers is used to accelerate innovaton may be highly relevant for tourism frms. This propositon is also supported by empirical research. For example in a study of experience-based tourism Stamboulis and Skayannis (2003) found that frst movers among the customers were an important source of knowledge during the innovaton processes.

However, whether the intangible and perishable nature of these services implies that knowledge from other external actors is less relevant in these innovaton processes is an open queston. It could be argued that the knowledge of external actors not directly involved in the co-creaton of services is too limited to contribute during innovaton processes in tourism, and research has for example confrmed that tourism frms seldom use knowledge from universites and research laboratories during their innovaton processes (Hjalager, 2010). However, in the recent tmes tourism frms have implemented much new technology both to streamline the internal processes and to improve the services provided (Hjalager, 2010), and it has been suggested that knowledge is embedded in this technology, implying that the implementaton of new technology indirectly involves the transfer of knowledge from technology suppliers to tourism frms (Evangelista, 2000; Hjalager, 2000).

One may also queston whether the intangible and perishable nature of tourism services also implies that outbound open innovaton is less relevant. Research has indicated that an important characteristc of successful outbound open innovaton is that it is possible to separate systems in specifc modules of knowledge that can be sold or shared to other actors during innovaton processes (Henkel, 2006). The intangible and perishable nature of tourism services may complicate modularizaton of tourism services, and this may reduce the applicability of outbound open innovaton in tourism (Aas & Pedersen, 2016). To explore these open questons about open service innovaton practces in tourism and provide an inital view of how these practses look, relatve to open innovaton practces in manufacturing, we conducted an exploratory study focusing on tourism services.

Research Method

A qualitatve case study approach (e.g., Yin, 2003) was chosen, as qualitatve research arguably has advantages when the phenomenon to be studied is not well understood and when the variables remain unknown (e.g., Johnson & Harris, 2003). To enable selecton of case organisatons that offered opportunites to learn and build theory, and to obtain a preliminary overview, two preliminary short interviews were conducted with managers of two Scandinavian networks of tourism frms. These informants were asked to identfy frms in different subsectors of the tourism industry (e.g., accommodaton, transportaton, dining, and atractons) that had recently developed and commercialized new services. 15 tourism frms in Scandinavia were suggested in these interviews, and we decided to select all 15 frms as case organisatons. All frms were members of at least one network focusing on business development and innovaton, also indicatng their interest in and focus on innovaton. Two frms – one amusement park and one ski resort – provided purely experiental services. Six frms – two airlines, two cruise and transport shipping frms, one airport operaton frm, and one railway frm – provided personal transportaton services. Six frms (all hotel chains) provided accommodaton and dining services. One frm, an independent hotel, provided accommodaton services only, and one frm, an independent restaurant, provided dining services only. Firm size varied, with the number of full-tme employees (FTEs) ranging from 11 (the independent hotel) to approximately 13,000 (a hotel chain).

Data were collected mainly in in-depth interviews with employees involved with innovaton in the case organisatons. We approached the frms' representatves in the business networks, in practce ofen the CEOs, and asked whether they were interested in their frms' partcipaton in the study. Representatves of all 15 frms responded positvely to our request. They were asked to indicate preferred employees to be interviewed about the frms' innovaton practces. These informants were CEOs in fve cases and other members of the top management groups (e.g., CMOs, CTOs) in the remaining cases. During interviews with the appointed key informants, we also identfed other relevant informants in the frms. These additonal informants were interviewed at a later stage. As a result, one to fve informants from each frm (30 in total) were interviewed. Table 1 lists the key characteristcs of the sample.

Based on the framework of Dahlander and Gann (2010), we developed a semi-structured interview guide (Appendix A). During the interviews, the informants were asked to select a few new services that the frms had introduced recently. To capture inbound open innovaton practces, informants were asked questons related to the sources of the new service ideas and to external collaboraton during the innovaton processes. To capture practces related to outbound open innovaton, the informants were asked to describe the introducton of new services by other frms, in which their frms had partcipated. All interviews were recorded and transcribed, and the data were coded and mapped onto the four open innovaton dimensions reflected in the framework of Dahlander and Gann (2010).

Findings

Informants provided numerous examples of new or improved services introduced by the sampled frms during the interviews. Some were perceived to have high degrees of newness, whereas others were perceived to have lower degrees of newness (Table 1). Hereafer, we refer to innovatons perceived by the informants to have high degrees of newness as 'radical', and those perceived to have low degrees of newness as 'incremental', although we realise that informants' perceptons are not necessarily aligned with more formal defnitons of these terms (e.g., Henderson & Clark, 1990; Gallouj & Weinstein, 1997). We report our empirical fndings according to the four dimensions of Dahlander and Gann's (2010) framework.

Table 1. The sample of tourism frm representatves

Firm	Type	FTEs	Informants	Innovaton examples (in brackets: degree of newness [high/low] as perceived by the informants)
A	Accommodaton and dining (hotel chain)	2700	CEO, hotel manager	Improvements of food concept (low), improvements of bed/pillow quality (low), establishment of new hotels at spectacular locatons (high), new experiental services (high)
B	Accommodaton and dining (hotel chain)	12000	CEO, CMO	New food concept (low), new marketng concept (low)
C	Accommodaton and dining (hotel chain)	2000	CEO, CMO, sales manager, hotel manager	Upgrading of hotel rooms (low), new conference concept (high)
D	Accommodaton and dining (hotel chain)	13000	CEO, CMO, HR manager, revenue manager, hotel manager	New mobile check-out service (low), new food concept (low), improved revenue management system (high), new housekeeping procedures (low)
E	Accommodaton and dining (hotel chain)	1250	CEO, CMO, two hotel managers	New food concept (low), new check-in concept (high), establishment of a new hotel in a new locaton (low)
F	Accommodaton (independent hotel)	11	Chairman of the board (owner)	New concept for affordable hotel accommodaton (high)
G	Dining (independent restaurant)	29	CEO
H	Experiental services (amusement parks)	160	CEO	New themed accommodaton concept (high), new dining concept (low)
I	Experiental services (ski resorts)	950	CTO, director of one ski resort, innovaton expert	New ski park for children (high), improvements of ski parks (low), new lif capacity/quality (low), new booking system (high), improved preparaton of ski slopes (low)
J	Personal transportaton	5700	Director of sales	New experiental travelling packages (high)
K	Personal transportaton	13000	Director of revenue	Improved loyalty programme (high)
L	Personal	1800	CMO, innovaton expert	New experiental travelling packages (high)
M	Personal transportaton	2600	Director of communicatons	New experiental travelling packages (high)
N	Personal transportaton	8700	COO	New experiental travelling packages (high)
O	Personal transportaton	3000	R&D director	Improvement of safety (low), new design of service facilites (high)

Non-pecuniary inbound open innovaton (sourcing)

New service ideas were ofen 'born' outside the borders of the frms in our sample. Incremental ideas, ofen related to the improvement of existng services, typically came from existng customers and were ofen identfed by front-line employees of the frms, or through surveys or other digital social media channels. Examples of incremental innovatons that emerged from customer input/ideas are the establishment of a new dining concept (frm H), the upgrading of accommodaton facilites (frm C), and the improvement of ski parks (frm I). Purposive inflows of knowledge from customers in the early stages of the innovaton process typically had a non-pecuniary nature. The following statements from two informants, from frms C and I respectvely, illustrate this practce:

'All our customers are given a questonnaire afer they have visited us, and we get lots of insights on how to improve our products from their answers. (…) We are also working right now on how we can establish a beter dialogue with our customers via different social media.'

'We have direct dialogue with our customers in the ski park all the tme. I will say that we to a high degree have developed the park based on ideas from the users. In partcular we involve customers that use our facilites ofen, for example cotage owners that spend much tme here.

External actors were also involved during the early stages of the development of more radical innovatons, but this involvement was typically more indirect. For example, when reflectng on the early stages of the development of a new concept for themed accommodaton (which he perceived to be a radical innovaton), the CEO of frm H stated:

'When we work with innovaton and development we pay atenton to what is happening around us, we always look at what other frms are doing and we contact and visit the atractons that have what we believe are the best in the world in our industry, and we try to learn from them. (…) The idea to build themed accommodaton as an extension of the experiences we already offer is in many ways my personal idea based on such visits to other parks.'

A similar practce may be illustrated by the following statement from our informant in Firm K when he reflected on the early stages of a new loyalty programme (which he perceived to be a radical innovaton):

'We have made a new and very specifc vision for frequent travellers and this innovaton project is about reaching this new vision. (…) The new vision was made by the top management, it was a top-down initatve, but of course we got input from different departments during the early process and we were also inspired by an actor in another industry who had a similar vision (…).'

Thus, our empirical fndings indicate that external actors were ofen sources of inspiraton during the early stages of more radical innovaton processes in the case organisatons, but that direct and purposive knowledge transfer from an external actor to the innovatng frm seldom took place at this stage. In later stages of radical innovaton processes, however, we identfed purposive non-pecuniary inflows of knowledge in several of the examples presented during the interviews. During the development of the themed accommodaton concept mentoned above, for example, frm H decided to involve existng and prospectve customers as partcipants in focus groups. This involvement was valuable and affected the fnal service design in many ways, as explained by the frm’s CEO:

'Afer we had decided to invest in this project, afer the inital conceptual phase, we travelled around in Norway to present our new concept to invited focus groups. The focus groups consisted of an existng customer base and some who had not been customers before. Between 12 and 20 people partcipated at each locaton (…). And frst I presented what we had planned to do (…). Then I said to the focus group members: now you can have fve minutes to tell why you think this is great (…). Thereafer we spent an hour together to discuss what was wrong with the concept. (…) And the results of this exercise were very informatve. The results made me change the design of the apartments (…), in part because I realised that a lot of single parents travel alone with their children (...). The changes I made were a direct consequence of the focus group interviews (…).'

Although non-pecuniary inflows of knowledge during these processes seemed to come most commonly from customers, informants also provided a few examples of such inflows from other frms in the value network. Our fndings suggest that this ofen happened when collaboraton with other frms was necessary to deliver the new service. For example, the informant from frm M (cruise and transport shipping frm) explained how they developed a new experiental service (perceived to have a high degree of newness) together with another frm:

'I can menton an example of a new experiental service we have developed for the German market. (…) To increase the number of German travellers we decided to collaborate with [anonymised], and we developed a new experiental service together that we called [anonymised]. (…) Our partner provided us with a lot of insight about their customers, which we used during the development of this new experiental service.'

The CEO of Firm A (hotel chain) provided another example illustratng a similar practce when they developed a new experiental service (perceived to have a high degree of newness):

'Afer we decided what concept we wanted to offer, we sat down with a partner, in this case the provider of the specifc experience product, and then we discussed how this concept could be realized in practce. (…) In this dialogue the partner came up with concrete ideas, while we came up with many requirements related to availability, service quality, safety and so on (...). Our requirements can ofen be a challenge for smaller players (...).'

The practces related to non-pecuniary inflows of knowledge during incremental new service development processes differed somewhat from those related to inflows during more radical service development. Although the incremental processes were very open in the early idea search stage, as described above, they were more closed during the development and implementaton stages. For example, when explaining how frm E had developed a new food concept (perceived to have a low degree of newness), one of the frm’s hotel managers stated:

'Afer we had decided to go for this new food concept, the course and conference manager, the chef, the restaurant manager and I worked together. Only the four of us worked on it. (…) We talked about it and the chef made some suggestons, and we tasted and adjusted. But we did not involve anyone else during this process. Not untl the new concept was launched (…).'

Pecuniary inbound open innovaton (acquiring)

During the interviews, informants provided some examples of purposive pecuniary inflows of knowledge. In some innovaton processes that were perceived to be radical, knowledge was acquired from suppliers, consultants, and research insttutons to solve explicit problems during the development process. For example when we asked the CEO of frm H how they were able to fnd members for the focus groups used during the development of the previously mentoned new themed accommodaton concept, he stated:

'We did this in cooperaton with a consultant named [anonymised]. He was an expert in loyalty development (…). So, he was given access to our customer databases (…) and based on the informaton in the databases he was able to identfy a sample of customers who should be invited to partcipate in focus groups (…).'

Firm E also acquired external knowledge when they developed a new conference concept. A hotel manager explained:

'When the new concept gradually began to be prety clear, we came to the conclusion that we needed to collaborate with an external party which can in a way certfy us and give us advice (…). And then we decided to make an agreement with [anonymised], and we have had a good collaboraton with them (…).'

Strikingly, few pecuniary inflows of knowledge of this kind were identfed in innovaton processes that informants perceived to have low degrees of newness.

Non-pecuniary outbound open innovaton (revealing)

Our fndings suggest that tourism frms occasionally purposively revealed internal knowledge to external actors, with the intenton to accelerate these actors’ innovaton. This practce may be illustrated with the following statement from the informant from frm M:

'Since a lot of the tourists that come to Norway travel with our ships we have a lot of detailed insight about what tourists travelling to Norway need and request. We are very willing to share this informaton with frms that are providing experiences for tourists in Norway so that these frms are able to improve their products and services. We believe that in the long run both we and they will beneft from this since beter experiental services will generate more satsfed customers which in turn will result in more repurchase'

In the examples identfed during our interviews, frms sharing knowledge with external partes were not paid directly. However, informants expressed the expectaton that the sharing of knowledge would result in increased sales for both partes in the long term. This may be illustrated with the following statement of the same informant from frm M:

'We do not share what we know with everyone. We have to be sure that the party receiving the knowledge is able to use this knowledge to actually innovate and improve its products. If we are not sure about this we will neither share nor collaborate. We do not want our brand to be associated with frms that do not deliver what the customers expect.'

Pecuniary outbound open innovaton (selling)

We identfed no example of a tourism frm in our sample selling knowledge to an external party

Discussion

We started this paper by asking the research queston: what types of open innovaton practce are utlised during the development of new tourism services? Based on a review of the open (product) innovaton literature, Dahlander and Gann (2010) identfed four types of open innovaton practce: 1) inbound non-pecuniary, 2) inbound pecuniary, 3) outbound non-pecuniary, and 4) outbound pecuniary.

In our interview data, we identfed the frst three types of open innovaton, but we were not able to identfy an example of outbound pecuniary open innovaton. Research has suggested that outbound pecuniary open innovaton is an important opportunity for manufacturing frms that aim to beneft from their R&D actvites (Huizingh, 2011). However, traditonal service frms have seldom been included in empirical studies of outbound pecuniary open innovaton. Previous empirical research has suggested that the intangible nature of services complicates modularisaton (de Brentani, 2001; Aas & Pedersen, 2013), and conceptual research has suggested that this implies that the identfcaton of tangible knowledge modules that may be sold in outbound pecuniary open service innovaton processes may be difcult (Aas & Pedersen, 2016). Thus, given the characteristcs of services in general, and tourism services in partcular, it may not be surprising that we are unable to fnd examples of outbound pecuniary open innovaton in tourism. In fact, our fndings confrm the ideas of prior conceptual research (e.g., Aas and Pedersen, 2016). Thus, we offer propositon (P) 1:

P1: It is difcult for tourism frms to sell outlows of knowledge to external actors in pecuniary outbound open innovaton processes.

However, we found several examples of non-pecuniary outlows of knowledge in our cases. In partcular, our fndings indicate that tourism frms decided to share internal knowledge with other tourism frms when both partes would beneft in the long run. Previous researchers have argued that the existence of incentves is a success factor for outbound non-pecuniary open innovaton (Henkel, 2006; West & Gallagher, 2006). Although the relevance of outbound non-pecuniary open innovaton has been given limited atenton in prior tourism innovaton research, research has suggested that tourism frms in a given region typically have natural interdependencies because they share the same customers (Fosse & Normann, in press). Thus, from a conceptual viewpoint it may be argued that tourism frms in this network ofen have long-term incentves for sharing knowledge with each other, even when the allocaton of a monetary value to a specifc knowledge outlow may be difcult. Our fndings contribute to the current understanding by providing empirical evidence to this conceptual idea. Hence, we offer P2:

P2: Tourism frms reveal knowledge to other tourism frms when the frms providing the knowledge and those receiving it will both beneft in the long run.

Our fndings suggest that the tourism frms in our sample utlised pecuniary and non-pecuniary inflows of knowledge during their service innovaton processes. This fnding confrms the fndings of prior empirical research on innovaton in tourism (Hjalager, 2010). However, our fndings also supplement the fndings of prior research considerably by showing that the stage of the innovaton process at which inflows of knowledge were used varied systematcally with respect to whether the innovaton process was perceived to be incremental or more radical. We used informants’ perceptons of whether innovatons were radical or incremental, although more formal defnitons of these concepts exist in the innovaton management literature (Henderson & Clark, 1990; Gallouj & Weinstein, 1997). Gallouj and Weinstein (1997), for example, defne a radical new service as a simultaneous change in the service, technical, and competence dimensions. Whether all innovatons perceived to be radical by our informants comply with such a strict defniton is questonable. Nevertheless, we argue that the informants’ perceptons reflect whether specifc innovatons had high or low degrees of newness

External sources were utlised to some degree in the early ideaidentfcaton stages of the innovaton processes perceived to be radical, but very indirectly, as sources of inspiraton. Concrete ideas and opportunites were specifed internally in most cases. Thus, frms in our sample rarely utlised purposive inflows of knowledge at the front ends of innovaton processes perceived to be radical. Compared with previous research, this fnding is somewhat surprising. Previous reports have suggested that external actors, such as users (Skiba, 2009), can be sources of radical new ideas in the service sector. We suspect, however, that our fnding may be explained by the specifc characteristcs of tourism services, which are arguably always co-created (Zeithaml et al., 1985; Gustafsson et al., 2012). Thus, the development of radically new ideas may require possession of indepth insight about internal frm characteristcs, such as employees’ skills and the frm’s vision and fnancial resources, as well as about market and customer characteristcs. Internal frm employees may be more likely than external actors, such as customers, to possess this combinaton of insights.

However, in the later stages of (perceived) radical development processes, our fndings suggest that frms ofen made use of purposive inflows of knowledge. Detailed insight and knowledge from existng and prospectve customers, as well as external frms (e.g., consultancy frms), were used to design and develop radical new services. This practce may be explained by the concrete and tangible nature of the external knowledge needed during the development process, compared with that needed at the front end; such knowledge can be acquired from or revealed by external actors. Inflows of knowledge from other frms (e.g., consultants) were typically pecuniary, whereas those from customers were typically non-pecuniary. The reason for this difference may be that customers have ‘self-interest’ in partcipatng in the development process, as they are future users of the new service. We thus offer P3:

P3: When radical new tourism services are developed, pecuniary and nonpecuniary purposive inflows of knowledge are utlised more typically during the development stage than at the front end of the innovaton process.

Inflows of knowledge were also used during innovaton processes perceived to be incremental. However, our fndings indicate that knowledge from external partes was typically utlised at the front end of incremental service innovaton. This fnding is perhaps not surprising, as customers are partcularly qualifed to make suggestons for improvement of the services they are experiencing. As customers have ‘self-interest’ in service improvement, the typically nonpecuniary nature of these inflows of knowledge is not surprising. We found limited use of inflows of knowledge in the later stages of incremental service innovaton processes, perhaps due to the low complexity of existng service improvement compared with the development of a completely new service. We thus offer P4:

P4: When new incremental tourism services are developed, non-pecuniary purposive inflows of knowledge are typically utlised at the front end of the innovaton process.

The four propositons are summarised in Table 2.

	Inbound	Outbound
Pecuniary	Utlised in the development stage of radical innovaton processes (P3)	Difcult to utlise (P1)
Non-pecuniary	Utlised in the development stage of innovaton processes (P3, P4) and at the front end of incremental innovaton processes (P4)	Utlised when the actors providing and receiving the knowledge beneft in the long term (P2)

Conclusions

This paper has empirically explored the types of open innovaton practce utlised during service innovaton processes in tourism. The fndings suggest that pecuniary and non-pecuniary inflows of knowledge are utlised. However, the stage of the innovaton process during which inflows of knowledge were utlised varied systematcally with respect to whether the process was perceived to be incremental or more radical. The fndings also showed that tourism frms reveal knowledge to other tourism frms in nonpecuniary outbound open innovaton processes. No example of pecuniary outbound open innovaton was identfed in our study. Thus, we argue that pecuniary outbound open innovaton may be difcult for tourism frms to utlise. These fndings may be of assistance for managers of tourism frms aiming to utlise open innovaton, as they may aid decisions about what types of such innovaton to implement.

We believe that we were able to identfy typical open innovaton practces implemented by tourism frms by purposely selectng innovatve tourism frms and by using a qualitatve in-depth approach. Tourism represents the subsector of service delivery characterised by intangibility, heterogeneity, inseparability, and perishability, and we believe that the fndings are applicable to other frms delivering services with the same characteristcs. Nevertheless, due to the limitatons with qualitatve studies we were not able to test this suggeston. Due to this limitaton, and due to the fact that recent research has indicated that the characteristcs of services, as well as those of innovaton practces, differ considerably among service subsectors (Kuester et al., 2013), we suggest that future research examine the propositons offered in this paper empirically in other service subsectors. Contnued exploraton of different types of service frm and empirical examinaton of the propositons offered in this paper will enhance our understanding of open service innovaton practces.

Another more general limitaton with non-experimental research, such as this study, is that it is only able to describe and evaluate present practce (e.g., Gerring and McDermot, 2007). Thus, based on our study we were not able to discuss whether alternatve open innovaton practces would be more benefcial for the case organisatons. We therefore suggest that future research should investgate whether frms could also beneft from the implementaton of other types of open service innovaton practces than identfed in our study.

Acknowledgement

Financial support from the Norwegian Research Council (research grant #227026/O50) is gratefully acknowledg

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Appendix A – Interview guide

1. What are your background and your role in the organisaton?
2. Please give some examples of new or improved services introduced recently by your frm.
3. Can you please select two new services introduced recently by your frm, and for each service explain a) where the idea came from (internal or external; if external, did you pay for it?), b) why the frm decided to invest in the development of the new service, c) how the development process was organised (did you collaborate with external partes?), d) what kinds of tool were used during the development process (e.g., social media, ICT tools), and e) how you measured the results of the development process?
4. Are the managerial practces related to the processes described in the previous queston typical for the management of innovaton processes in your organisaton?
5. If possible, please give some examples of new or improved services introduced lately by other frms, where your frm has partcipated in the development.
6. Can you please select two new services introduced by other frms, where your frm has partcipated during the development process, and for each new service explain a) why you partcipated, b) how you partcipated (what was your role?), c) whether the innovatng frm paid for your assistance, d) what kinds of tool were used (e.g., social media, ICT tools), and e) how your was partcipaton evaluated?
7. Are the practces described in the previous queston typical when your frm partcipates in other frms’ innovaton processes?

Biographical note

Tor Helge Aas is an Associate Professor at the Department of Management, School of Business and Law, University of Agder, Norway and a Senior Researcher at Agderforskning AS, Norway. Dr. Aas has a PhD in strategy and management from the Norwegian School of Economics. He is conductng research in innovaton management, management control, and strategic management, partcularly in relaton to the service sector.