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Key words: Market orientation, technology orientation, service innovation capability, social and health care, SME,
JEL codes: O31, I11
ABSTRACT
Developing new services is vital for a service-based company to succeed in the long run. This requires both innovation capability and understanding customer needs. Previous research has shown that if a firm wishes to develop an innovation superior to the competition, it must have both a strong technology orientation and a strong market orientation. The objective of this study was to examine the effect of market orientation and technology orientation on service innovation capability in SMEs operating in the field of social and health care. In addition, this study examined the obstacles to using digitalization and new technologies in service innovations. Mixed methods design was applied so both quantitative and qualitative data was used. The results from the quantitative part of this study show that both technology orientation and market orientation have a positive and statistically significant effect on service innovation capability in SMEs operating in the field of social and health care. Furthermore, market orientation is the most important variable in the model. The results from the qualitative element again show that some of the hindering factors of using digitalization and new technologies arise from practices and attitudes of social and health care actors but others arise from the digitalization and new technologies themselves.
1.INTRODUCTION
Developing new products and services is vital for any company to succeed in the long run. This requires innovation capability and understanding customer needs. Innovation capability is a manifold construct, and it is thus hard to specify directly (Saunila & Ukko, 2014). Lawson and Samson (2001) define innovation capability as a theoretical framework aimed at describing the actions that can be taken to improve the success of innovation activities. There are only a small number of studies which have examined differences in innovation development within the manufacturing and service sectors, and within service enterprises, the focus has been on the knowledge intensity of sectors (Forsman, 2011). According to previous studies (see Evangelista, 2000; Forsman, 2011) service and manufacturing sectors show more similarities than differences with respect to the basic dimensions of innovation development. However Jansen et al., (2016) argue that service innovation follows a different logic to product innovation...