Exploring the relationship among patterns, information technology, and performance for sme-based service innovation.

Although service innovation has long been considered crucial for economic development, systematic and comparable empirical evidence elaborating the activities and effects of service innovation, particularly from a smalland medium-sized enterprise (SME) perspective, is limited. To fill this research gap, this study focused on the innovative behaviors of SMEs in service industries to clarify the relationships amongst the patterns, outcomes, and impact of information technology (IT) use. In this study, 103 SMEs in the tourism and food service sectors receiving sponsorship from the Taiwanese government between 2006 and 2011 were analyzed. The results indicated that service innovation projects initiated by SMEs tend to implemented using a multifaceted approach with the goal of accessing new markets and new customers. The short-term outcomes of these service innovation projects were reflected mainly in revenue and new product and service offerings. In addition, IT was determined to be crucial in facilitating service innovation, but not a necessity. Finally, to align with the nature of the service industry and the industry life cycle, SME-based service innovation tended to focus on commercial and softer aspects, which reflected the key differences between firms of manufacturing sectors and SMEs in typical service sectors in terms of research and development patterns and focus.