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Jervis, Robertson, & Townsend, 1974; Mansfield, 1968). Initially, the primary focus
was on managing and executing the R&D activity. However, as the need for the
customer/market focus in product development activities increased over the follow-
ing decade, the marketing discipline also became a key contributor to research on
NPD. Themes such as the “voice of the customer” (Griffin & Hauser, 1993) and
“lead user” (von Hippel, 1988) brought fresh insights to PD. An increased emphasis
was also placed on the organizational processes and communication that under-
lie product development. Consequently, organization theories became relevant. The
organizational perspective elicited many issues related to product development pro-
cesses and activities including team structure and building, leadership, recognition
and reward systems, team culture, conflict management, group decision making, and
communication (Allen, 1970; Katz & Tushman, 1981; Ancona & Caldwell, 1992;
Dougherty, 1992).
By the early 1990s, two other themes - operational integration and prod-
uct development strategy - had assumed significance in product development
research. Increased globalization and competition resulted in more dispersed prod-
uct development activities and renewed emphasis on reducing development costs
and time-to-market. Such enhanced operational efficiency in product development
was made possible by the more effective integration of product development activi-
ties across the supply chain. Thus, issues such as supplier involvement in innovation,
design for manufacturing, production process and schedule optimization, and pro-
cess concurrency highlighted theoretical models and insights from the fields of
operations management and production (Imai, Ikujiro, & Takeuchi, 1985; Clark &
Fujimoto, 1991; Hayes, Wheelwright, & Clark, 1988).
At the same time, highly dynamic product technologies and competition based
on core competencies forced most organizations to ensure tighter linkages between
their product development projects and business strategy and to adopt coherent
enterprise-wide product development strategy. This led to the application of various
concepts from the strategy literature (e.g., strategic product planning, technology
planning, portfolio management, product platform strategy, technology alliances)
in devising product development strategies (Cooper, Edgett, & Eleinschmidt, 1999;
Gawer & Cusumano, 2002; Meyer & Lehnerd, 1997).
While the early focus of the innovation research community has been on prod-
uct innovation, in the past 10 years or so, there has been an emerging focus on
service innovation. It has been estimated that the service sector accounts for approx-
imately 70-80% of the gross domestic product (GDP) in many developed countries
(Chesbrough & Spohrer, 2006; Rust & Chung, 2006; Vries, 2006). Considerable
research effort has gone into defining service and identifying focus and the bound-
aries of service innovation. However, two critical shifts in the service sector indicate
that research on product and service innovation has to go hand in hand.
The first shift is the increased complexity and the convergence in products
and services, as well as in their design and production (Gomes-Casseres, 1994;
Nambisan, 2001). In most cases, the contemporary offering is an embodiment of
several specialized skills that integrates across product and services. Consider the
services offered by a typical healthcare organization. The evaluation, diagnosis,
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