Innovation in Services and Business Models

This is a new course, not only within Haas and the MOT Program, but within academic campuses around the world. This course is an experiment to address a burning issue in business today: most of the economic activity in developed economies is services-based. Yet most of our knowledge about innovation is based upon products, not services. A recent survey by the National Academies of Engineering found that “the academic research enterprise has not focused on or been organized to meet the needs of service businesses”.

This is not an abstract concern for Berkeley students. More than 70% of the graduating 2004 class from Haas took jobs in knowledge-intensive, service businesses. Looking further on in one’s career, more than 63% of the INC. 500 companies in are services companies. Service businesses represent the future for the vast majority of Haas and MOT students. The course should be risky (it’s brand new), exciting, and useful.

Our course will examine services innovation, and focus upon the business model in creating and managing innovation in services businesses. We will also consider how product-based businesses can — or cannot — transition to service-based businesses. During the course, we will have outside visitors from companies like IBM and SAP, and Berkeley faculty from I-Scool and Economics.

Biographical Information: Henry Chesbrough is Executive Director of the Center for Open Innovation at the Haas School of Business at UC Berkeley. I teach in the MOT Program at Haas, which is joint with Engineering. Previously, I was an assistant professor of business administration at Harvard Business School. I hold a Ph.D. from UC-Berkeley, an MBA from Stanford University, and a BA from Yale University, summa cum laude. Yes, I am over-educated.

However, I am also experienced. Prior to embarking on an academic career, I spent ten years in various product planning and strategic marketing positions in Silicon Valley companies. I worked for seven of those years at Quantum Corporation, a leading hard disk drive manufacturer and a Fortune 500 company. Previously, I worked at Bain and Company.

My research focuses on managing technology and innovation. My new book, Open Innovation (Harvard Business School Press, 2003), articulates a new paradigm for organizing and managing R&D. This book was named a “Best Business Book of 2003” by Strategy & Business magazine, and the best book on innovation in 2003 on NPR’s All Things Considered. Scientific American magazine named me one of the top 50 technology and business leaders for 2003 in recognition of my research on industrial innovation.

See the MOT site for details.