Users as Service Innovators: The Case of Banking Services
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SSRN-id1460751.pdf
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Author(s)
Oliveira, Pedro
von Hippel, Eric A.
Date Issued
August 2009
Publisher
Cambridge, MA; Alfred P. Sloan School of Management, Massachusetts Institute of Technology
Series/Report no.
MIT Sloan School of Management Working Paper;4748-09
Abstract
Many services can be self-provided. An individual user or a user firm can, for
example, choose to do its own accounting – choose to self-provide that service - instead of
hiring an accounting firm to provide it. Since users can ‘serve themselves’ in many cases,
it is also possible for users to innovate with respect to the services they self-provide. In this
paper, we explore the histories of 47 functionally novel and important commercial and
retail banking services. We find that, in 85% of these cases, users self-provided the service
before any bank offered it.
Our empirical findings differ significantly from prevalent producer-centered views
of service development. We speculate that the patterns we have observed in the banking
industry will be found to be quite general. If so, this will be an important matter: perhaps
75% of GDP in advanced economies today is derived from services. We discuss the
implications of our findings for research and practice in service development.
Subjects
service innovation
service development
user innovation
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