A taxonomy of service innovations based on the innovative activity efficiency of service firms: A DEA approach

The lack of empirical studies on the relative efficiency of the innovative activities of service firms is one of the problems of monitoring growth of the service sector. To fill this void, from the perspective of efficiency, this paper provides empirical evidence on the efficiency of innovative activities. In addition, a new taxonomy of services that yields a dominant role to service firms is further proposed based on innovative activity efficiency. For this, using data envelopment analysis (DEA): 1) the relative efficiency of service firms is evaluated; 2) the optimal weights, which are called as efficient efforts, are used to develop a taxonomy by way of a new measurement concept. As a result, a taxonomy is proposed with four clusters: service improvement innovation, IT-based external process innovation, researcher-based patenting innovation, and physical resources-based new service and internal process innovation. The comparison of innovation patterns with previous taxonomies is also highlighted.