The growing cost and demand of healthcare is a major concern globally. Service innovation has been put forward as a top priority to address the challenges of healthcare. However, the concept of service innovation is poorly understood, in particular the differences between incremental and radical service innovation. The chapter makes two important contributions. Firstly, it conceptualizes incremental and radical service innovation based on internal and external changes; in particular, it identifies four types of service innovations. Secondly, it explores the effects and diffusion processes of service innovation. It aids practitioners and researchers to understand radical service innovation in a new way and to shed light on effects and diffusion of service innovation in healthcare.

Purpose-The purpose of the study is to create an initial understanding of how various internal and external actors contribute to the development of new services based on the research question considering "which different actor takes part in small companies' service development processes in order giving access to the resources needed and what roles do they play?" Design/methodology/approach-Due to the lack of previous studies within the area, the focus in this study has been to use a qualitative method to reach a deeper insight about how small companies' service development could be described, as seen from an actor's perspective. Findings-Based on the empirical analysis, the study identifies seven main categories of actors who were involved in the service-development process that contributes with different types of resources and their role varies during the development process. The actors and their roles are presented in a model giving initial understanding how various internal and external actors contribute to the development of new services. Research limitations/implications-Using a qualitative approach, the research results may lack generalizability. Instead, the findings should be seen as an initial starting point for further studies. Practical implications-The paper's highlight a number of actor roles that need to be handled to create possibilities for small companies' service development. Originality/value-The paper fills a research gap in the service innovation research. Traditionally, this research has been focused on larger companies, with a focus on what happens inside the companies.

Purpose – The purpose of this study is to describe how parted or divided service development is carried out, where interactions and cooperation need to take place with other actors in order to create the foundations for the service, in the form of a coherent specification of the extended service concept.

When public-sector services are outsourced to private commercial operators, the issue of new-service development can become problematical because the political/social objectives of the controlling authority are often different from the commercial imperatives of the private operator. These (often conflicting) imperatives can cause difficulties in new-service development with regard to both: (i) deciding what new services are required; and (ii) deciding how the service-development process should proceed. This study takes a qualitative approach in investigating what happens during the development of new services in the Swedish public-transport sector, in which services are contractually outsourced from public authorities to private commercial operators by public tender. The results of the study show that: (i) the development of new services in this context is especially challenging; (ii) conflicts do arise between public and commercial interests; (iii) collaborative service development is significantly hampered by the regulatory framework and contractual arrangements; and (iv) the contracts themselves actually represent an important aspect of the overall service-development process. The implication for managers is that the formulation of tendering documents and contracts must be seen as an important determinant of service development, often for many years in advance.