Users as Service Innovators: The Case of Banking Services

33 Pages Posted: 25 Aug 2009 Last revised: 26 Apr 2015

Pedro Oliveira

Católica Lisbon School of Business and Economics

Eric A. von Hippel

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: December 2010

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 banking with respect to the dominant role of users in service development will prove to be quite general. If so, this will be an important matter: on the order of 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.

Keywords: Service innovation; service development; user innovation

Suggested Citation

Oliveira, Pedro and von Hippel, Eric A., Users as Service Innovators: The Case of Banking Services (December 2010). MIT Sloan Research Paper No. 4748-09. Available at SSRN: https://ssrn.com/abstract=1460751 or http://dx.doi.org/10.2139/ssrn.1460751

Pedro Oliveira

Católica Lisbon School of Business and Economics ( email )

Palma de Cima
Lisboa, 1649-023
Portugal

Eric Von Hippel (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E62-455
Cambridge, MA 02142
United States
617-253-7155 (Phone)
617-253-2660 (Fax)

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