Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

ORGANISATIONAL LITERATUR INNOVATION IN HUNGARY
On the contrary, there is a steady tendency of
growth in the service sector in terms of both
its economic performance and employment
capacity. In other words, services in general
and especially business services represent a
potential sustainable development path in the
Hungarian economic modernisation.
2. INNOVATION IN SERVICES
There is a wide consensus in both the academic
and professional communities that innovation
is at the hearth of economic development and
wealth. The literature dealing with the issues of
innovation makes a distinction of two types of
innovation. The first is often labelled the linear
model of innovation. This model describes
innovation as a linear chain of discrete R&D
activities in which each development stage
is separated from the others. Innovation
is driven by scientific research or direct
market demands. In this model, of particular
importance is codified knowledge, which
originates in scientific research and flows
in one direction. Critiques of this approach
often claim that a linear form of innovation
represents the exception rather than the rule in
practice (Schienstock & Hamalainen 2001).
The second approach is the recursive model
of innovation, which describes innovation
as a novel combination of existing
knowledge. In this model, innovation
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is driven by market needs and new
knowledge is an unintended result
of the complex interdependent
relationship between the various actors.
Multiple feedback mechanisms are important
here, as is the intensive cooperation between
different actors (firms, clients, suppliers,
scientific institutions), as well (Schienstock &
Hamalainen 2001). In this regard, innovation
is open and happens dominantly in complex
networks rather than in individual firms, while
the institutional environment plays a crucial
facilitating role.
In the Hungarian discourse on innovation, the
linear model plays a dominant role, although
the recursive model better suits to the real
characteristics of the innovation process,
especially in the case of service innovation. The
former model places emphasis on technology
largely embodied in machinery, and equipment
as well as the processes involved in the
development and commercial introduction
of new, technologically advanced goods. In
addition, this model neglects such “soft”
elements of innovation such as cooperation,
collective knowledge development and sharing,
trust relations, etc.
According to Salter and Tether (2006:2),
“services were long thought to be laggards with
regard to innovation – they were assumed to be
uninteresting adopters of existing technologies
rather than producers of new technology.” 3
Since the beginning of the 1980s, however,
there has been a shift in this rather one-sided
approach of service innovation. The authors
identified the following four generations of
innovation research in services.
The period of neglecting service innovations
can be characterised by narrow perception
of innovation primarily focusing on the
creation of new technologies, while diffusion
and adaptation of new technologies was
seen as either unproblematic or of secondary