Innovation taxonomy offers a comprehensive way to organize and understand the diversity of innovative patterns in firms and sectors. However, prior studies on patterns of innovation have less consideration on services, and adopt criticized approaches to study service innovation. This study aims to develop a service regime framework to analyze firm patterns of innovation in services.
The service regime, as a synthesis approach extends the technological regime to govern the service innovation patterns. Its framework goes beyond governance of technical systems to encompass non-technological trajectories, informal appropriability, and user involvement mechanisms. Four dimension of service regime are elaborated: sources of innovation, innovation trajectory, appropriability and customer involvement. The service regime provides the rule of set for service firms, and shapes a kind of governance to constrain what a firm behaves and acts.
A three-stage research design is conducted. The first stage considers a questionnaire design that is used to relevant literature review, open-end interview and instrument pre-test. The second state is a large-scale quantitative survey, where the questionnaire includes four parts: innovation input, service regime activities, innovation output and demographic information. The firm-level survey is conducted from 1,103 largest Taiwanese service firms. The 311 valid samples are collected to give the response rate of 28.2%. The data analysis is the final stage that includes principal component analysis and cluster techniques.
As analysis techniques utilized, a new taxonomy is identified: (1) innovation laggards, (2) process-organizational centric innovators, (3) product-business model centric innovators, and (4) customer involvement centric innovators. Moreover, this study reveals that these patterns of innovation in services are different from those in manufacturing, which are more stylized with diverse sources of innovation, coupling innovation trajectories, jointly utilization of formal and informal appropriable mechanisms, and intensive customer involvement usage. The current study concludes that these firm patterns of innovation in services are best described as loosely couple system and these four are service regime-specific rather than sector-specific. The service regime offers a useful framework that allows a better account of firm patterns of innovation in services.

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