Factors Affecting Innovation in the Service Industry: A Literature-Based Model

Several studies have identified various factors affecting innovation within the service industry. The purpose of this study was to integrate all identified factors into a single comprehensive model. A hierarchical graphical model of five levels comprising 25 interrelated factors was developed using steps adapted from the interpretive structural modeling technique. These factors and their interrelationships were determined based on results reported in 35 empirical studies. The bottom level of the model comprises four factors: organizational culture, flexibility, organization structure, and size of the organization. Any efforts for enhancing innovation should begin by considering these factors. The findings of this study could provide valuable insights for decision-makers within services organizations seeking to increase the chance of success of their innovation programs, which could positively impact the competitiveness of their organizations and thus contribute to sustainable economic growth and national prosperity.