The Dilemma of Service Productivity and Service Innovation: An Empirical Exploration in Financial Services

Jaakko Aspara, Jan F. Klein, Xueming Luo, Henrikki Tikkanen

Research output: Contribution to journalLiterature reviewpeer-review

17 Citations (Scopus)


We conduct a systematic exploratory investigation of the effects of firms’ existing service productivity on the success of their new service innovations. Although previous research extensively addresses service productivity and service innovation, this is the first empirical study that bridges the gap between these two research streams and examines the links between the two concepts. Based on a comprehensive data set of new service introductions in a financial services market over a 14-year period, we empirically explore the relationship between a firm’s existing service productivity and the firm’s success in introducing new services to the market. The results unveil a fundamental service productivity-service innovation dilemma: Being productive in existing services increases a firm’s willingness to innovate new services proactively but decreases the firm’s capabilities of bringing these services to the market successfully. We provide specific insights into the mechanism underlying the complex relationship between a firm’s productivity in existing services, its innovation proactivity, and its service innovation success. For managers, we not only unpack and elucidate this dilemma but also demonstrate that a focused customer scope and growth market conditions may enable firms to mitigate the dilemma and successfully pursue service productivity and service innovation simultaneously.
Original languageEnglish
Peer-reviewed scientific journalJournal of Service Research
Issue number2
Pages (from-to)249-262
Number of pages14
Publication statusPublished - 09.11.2017
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • service productivity
  • service efficiency
  • service innovation
  • data envelopment analysis
  • empirical exploration
  • Business, Markets and Societal Dynamics
  • Marketing Logics and Strategizing


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