The Project “Paths of Innovation in Services” (Notice FAPERGS 05/2019) is the third in a series of profound research efforts accomplished by the Innovation Research Center (NITEC) to outline the paths of innovation in the different sectors of the economy. In particular, the objective of this project is to know in detail the innovative behavior of the companies in the service sector, to seek strategies and to subsidize innovation policies aiming at the competitive reconversion of the Rio Grande do Sul economy.

It is undisputed that the intensive use of digital technologies (such as Artificial Intelligence, the Internet of Things, Robotics and Big Data) and the speed of information are increasingly bringing the service provider closer to its consumer market, which results in a new market dynamics. More than that, the evolution of the logic in the organization of economic activities, in all sectors, seems increasing to resemble the logic of services. In other words, increasingly relational, complementary, integrated, and becoming increasingly “intelligent”.

In this regard, this research project advances towards understanding the transversality of service innovation for value generation in the 21st century. Service innovation can be defined as a process that encompasses all development activities and that realizes itself in the production/consumption relationship of service. Nevertheless, there are a few studies that seek to understand how this process happens in practice.

To understand this phenomenon, the identification of the innovation effort in companies will be accomplished not only from traditional indicators but mainly through the unprecedented Innovation Capabilities Model developed and published by NITEC researchers. This Model is going to be used to translate the innovation behavior of companies, allowing them to make a precise portrayal of the current situation. It is only from the possession of different combinations of capabilities that it is possible to propose a feasible path to competitive reconversion.

Thus, identifying the “Paths of Innovation in Services” will help to fill a gap in the literature and, most of all, foster new business management practices and public policies. By analyzing the innovation capabilities of companies, this project seeks to understand the digital revolution in the sector, going beyond the simple adoption of “gadgets & apps”, but also considering the introduction of new business models, new products and new behaviors.

Furthermore, this project introduces the concept of “smart services”, which are businesses characterized by the high level of knowledge applied to the business, by the introduction of creativity as a tool of differentiation in the service provision, by the intensive use of digital technologies and by the consequent contribution of new business models to the delivery of value. These new services constitute alternatives for wealth generation and prosperity in the 21st century.

Therefore, the approach presented in this project will allow us to understand how the knowledge economy can boost the competitive reconversion in the state of Rio Grande do Sul and, thus, achieve a sustainable development. This study is aligned with the directions taken by political Sciences, technology and the innovation implemented by the Department of Innovation, Science and Technology of the State of Rio Grande do Sul (SICT/RS) in the period 2019-2022.