Introduction
Innovation in Services: a theoretical approach
Innovation in Services: a sector-based approach
Changes in interaction with respect to external agents
Innovation in multimedia and ICT industries
Innovation and space
Conclusion
Bibliiography

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Introduction
Literature on services innovation services is still at its very infancy in Spain. Innovation has traditionally been approached from an industrial-based perspective, in the line of the trend observed in other developed countries, but with a substantial difference: whereas the economic profession has gradually spanned the scope of analysis so as to include services as innovative activities, studies on innovation in Spain have remained clustered on the manufacturing sector. Nevertheless, some steps have been made in the very recent times, mostly led by the COTEC Foundation for Technological Innovation and some sparse scholars.

The present survey, which covers research on services and innovation undertaken over the last four years in Spain, is structured as follows: the first section is devoted to review the theoretical approaches to services innovation in Spain. The second section (theme II) describes the empirical literature on services innovation (case studies and surveys). The third section studies the relevant literature on innovation in specific service industries; the fourth section analyses the relationship between innovation and space, whereas the last one describes innovation in ICT and multimedia industries.

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Innovation in Services: a theoretical approach
The only rigorous theoretical-based study about innovation in services in Spain published so far is the one by Escauriaza et al (2001) under the sponsorship of the COTEC Foundation. The merit of the study is not related to the value it adds to the knowledge of service innovation as such, but rather to its pioneering character and the impact it may have as an enabler of future fruitful research. The structure of the study is very much in the line of other similar reviews on the subject. Accordingly, the analysis starts by emphasising the pervasiveness of innovation in all economic sectors, including services, and then it shifts to the study of some important features of innovation in tertiary industries: innovation patterns, types of innovation (both technological and non-technological), life cycle, evidence of innovative activity and obstacles that may hinder innovation. Once the core theoretical foundations are presented, the report focuses on the suitability of different indicators of innovation to properly capture innovation in services, concluding that the two traditional indicators used in manufacturing (i.e., R & D and patents) fail to apprehend the wider and often fuzzy concept of innovation in services.
The COTEC report by Revilla et al (2001) also contains some evidence on the theoretical foundations of service innovation, but it is solely confined to the explanation of some of its particularities, dimensions and patterns.
Innovation in Services: an empirical-based approach
Three main contributions to the literature are worth stressing here: the COTEC (2000) study, Jacob and Bravo (2001) and Sánchez and Luque (2001).
The aim of the COTEC (2000) study is the promotion of innovation in some South American less-developed countries that have traditionally suffer from a lack of innovative initiatives, by presenting a collection of some successful examples of innovation that may spur other similar efforts. Contrary to the technological bias traditionally pervading the study of innovation, innovation is depicted here as a creative way to give response to an (unsatisfied) demand need in a certain market, whereby the approach adopted is rather non-technological. Innovation in services is specifically distinguished from the rest of cases and five examples are analysed, namely: innovation in a centre providing care to the Japanese old population living in Peru (Arce et al), delivery innovation in a floating hotel (Riverola), innovation in a charge office suited to the characteristics of the Peruvian market (López-Dolz et al), a web page providing on-line and up-to-date information about the Ecuador stock exchange (Vera) and a Tex-mex restaurant that is both a restaurant and a beer factory (Llano).
The study by Jacob and Bravo (2001) is rather different in terms of scope, methodology and approach. The analysis is focused on the study of innovation in a particular service industry (tourism), for a particular Spanish region (Balearic Islands), and is based on direct interviews to the managers of 20 top tourist companies (hotels, real estate and travel agents). The results seem to favour the diffusion of innovation in the sector, since all companies interviewed undertook at least an innovation in the five preceding years. Amongst the six types of innovation distinguished (product, process, internal and external organization, market and delivery innovation) changes in internal organisation is the most cited category (30.1% of the total). On the other hand, although the study deliberately admits non-technological innovation to be of primordial importance in services, the empirical evidence is conclusive in stressing the role of technological innovation, with a particular emphasis placed on Information and Communication Technologies (ICT hereafter) as an innovative source. More importantly, the survey provides useful evidence regarding the motivations, sources, barriers and implications of innovation. In this respect, Balearic tourist enterprises seem to adopt a defensive strategy when they innovate, since “survival” is the most cited motivation of innovation. Likewise, as far as the origin of innovation is concerned, it comes primarily from the decisions made by top managers, whereas the lack of skilled personnel is acknowledged to be the most outstanding barrier. Finally, the most cited impact of innovation is the achievement of a good image, name or reputation, justifying the traditional role of such mechanism as a way to offset the traditional difficulty of information asymmetry in services.

Finally, Sánchez and Luque (2001) also use the system of interviews to study the degree of introduction of Electronic Data Interchange (EDI) in wholesale distribution and the implications derived from its use. The results seem to point out that the advantages perceived are very much to do with the achievement of greater levels of efficiency, flexibility and better interaction with external agents, whereas the need to achieve a critical mass to fully reap the benefits is considered the main obstacle to implement this new tool, which is adapted freely (not as a defensive weapon) by most enterprises.

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Innovation in Services: a sector-based approach
Most sector-based studies of innovation are focused entirely on technological innovation enabled by the introduction of ICT, while non-technological innovation plays a minor role. Two services industries have received special attention in Spain, as far as innovation is concerned: the tourist sector (very much reflecting patterns of specialisation in the country), and wholesale distribution (where automation has increasingly gained momentum). The literature on this issue may be categorised along two different lines of research: general issues, on the one hand, and aspects related to shifts in interactive behaviour encouraged by innovation, on the other.
General issues
Molina (1999) analyses the implications that the development of new technologies have displayed on the innovative behaviour in the tourist distribution systems. Amongst them, the use of information systems (especially Internet) and the emergence of direct booking centres are case in point. According to the author, the aforementioned changes are challenging the business and even the survival of the small and traditional travel agents, pushing them to undertake one of the two following alternatives: either get involved in consolidation processes or search for niche markets.
Pombo (1999) highlights the increasingly important role played by Information Technologies (IT) to support healthcare in hospitals. This IT implementation contributes to adapt the system to the changing needs, building a new future frame for healthcare, logistic and management strategies. The author describes the Alcorcón Hospital Foundation (Madrid) experience and new projects. The availability of more powerful and versatile healthcare information technologies represents in his view an overall improvement for the near future in hospital environment with integrated hospital information system and development of electronic medical record being one of the keys.

On the other hand, Marcos (1999) concludes that, in the convoluted context of uncertainty mainly due to globalization and liberalization impulses, postal services are doomed to pose innovation as a crucial asset if the survival of the sector wants to be ensured. Innovation must be interpreted in an holistic way; accordingly, not only technological innovation (both at process and product level) is relevant, but also organizational innovation, which displays more powerful effects when applied in conjunction with the former.

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Changes in interaction with respect to external agents
Revuelto (2002) roots the analysis on the rapid pace of technological change experienced by wholesale and distribution over the last years, highlighting the implications that this may have on the settlement of new management techniques and the relationship between the client and the supplier. On the other hand, Martínez and Pablos (2001), define what they consider a “virtual process” in the insurance industry by considering the role of information and communication technologies in enabling new forms of interaction on the traditional value added system of companies. In doing so, the paper diagnoses the main relationships that organizations maintain with other companies (clients, suppliers, distribution channels, etc), distinguishing among the reasons leading to co-operation, e.g. flexibility, costs, new product development and design or new ways of delivering the service.

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Innovation in multimedia and ICT industries
The inclusion of this theme in the present survey may be justified on two grounds: first, some services are themselves part of the ICT sector, and, second, innovation in ICT industries profoundly alters the possibilities of innovation in the services industries as services turn out to be their major users.
Pablo and Muñoz (2001) describe some of the paramount innovations taking place in the audio-visual sector, highlighting its ambivalent character. Hence, on the one hand, they open up new opportunities in terms of market expansion and reduction of distribution costs, but, on the other, they pose risks and threats in the form of, for example, piracy or peer-to peer systems like Napster and Gnutella. The role of the Public Administration is crucial here in adapting legislation and sectoral policies to some of these unwanted consequences of the rapid pace of technological change.
On the other hand, Chaminade and Montejo (2000) stresses the importance of ICT industries (some of which are services) in the Spanish system of innovation. In fact, innovation in ICT industries clearly outstrips the figures showed in other sectors of the Spain economy, even though they still remain very far from evidence collected in other countries. The explanation of this gap is mainly due to the absence of infrastructures supporting innovation and, more broadly, to the absence of an appropriate environment conducive to innovation, which is epitomised by the lack of skilled personnel. The same intuition is shared by Chaminade (2001), although the focus here is the telecom sector.

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Innovation and space
To the best of my knowledge, the only attempt to bridge the promising areas of innovation and internationalization has been carried out by Rubalcaba and Gago (2002). This study explores the role of international and national effects in regional concentration of innovative services. The authors start from the assumption that the increasing influence exerted by globalisation on service industries is epitomised by innovative advanced services, many of which were traditionally located following only national, regional or urban patterns. Using this conclusion as a framework of analysis, the hypothesis to be tested is whether, in the light of the changes currently evolving and forged by globalization, business services concentration is led by international patterns, or, conversely, the traditional factors remain important. The econometric exercise indicates that both effects affecting the business service regional concentration must be interpreted together in order to offer thorough description of the existing profiles. Other explanatory factors, such as GDP per inhabitant, are very influenced by these results: the role of international capitals is highly relevant.
In a different vein, Buesa (2002), sketches the Spanish regional distribution of indicators of innovation, concluding that Madrid is by far the leading innovative region. The predominant role of Madrid amongst Spanish regions mainly hinges on its particular productive structure, which is somewhat specialised on high-tech industries and knowledge intensive business services.

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Conclusion
This short review on services and innovation is structured along five different themes, covering a wide scope: pure theoretical, empirical-based studies, sectoral studies, analysis of services innovation in space and innovation in ICT and multimedia industries.
Two problems are revealed by this survey. First, despite the fact that innovation in services seem to increasingly be considered in the Spanish research agenda, there is still a great way to cover to reach research standards of our European counterparts. Second, the majority of the Spanish literature in this area is concerned with understanding isolated service sectors and service issues from different point of views. In particular, a large number of studies have concentrated on the Spain’s tourist sector and wholesale distribution. This can be partially explained by the importance of tourism in the Spanish productive base, and the relatively salient position of wholesale distribution in terms of technology implementation. The only major theoretical report is by Escauriaza et al (2001), which, although rather general in scope, it has paved the way for other works to flourish in the future.
The latter report is fitted into a framework of increasing interest to the issue of innovation in services, led primarily by the COTEC Foundation and by some sparse scholars. In relation to this, it is worth mentioning the relevance of some on-going projects such as the Services Innovation Survey in Madrid which is being carried out by Gago and Rubalcaba.

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BIBLIOGRAPHY

Arce, G. et al., 2000, 'El centro recreacional de Ryochi Jinnai: Cuidado diurno de ancianos' ('The Ryochi Jinnai centre care: daytime care for old people'), in Muñoz-Seca, B. and J. Riverola (eds): Casos iberoamericanos de innovación en operaciones (Latin-American cases of innovation in operations), Practical Innovation Collection, COTEC Foundation for Technological Innovation, Madrid.
Buesa, M., 2002, 'Industria, ciencia y tecnología' ('Industry, science and technology'), Economistas, No. 91, pp. 396-401.
Chaminade, C. and Mª.J. Montejo (Coords.), 2000, Innovación en las Tecnologías de la Información y las Comunicaciones (Innovation in the Information and Communication Technologies), Reports About the Spanish System of Innovation, COTEC Foundation for Technological Innovation, Madrid.
Chaminade, C., 2001, 'Innovation in the Spanish Telecom Cluster. Policy Implications', in OECD Innovative Clusters: drivers of national innovation systems, OECD, Paris, pp. 219-42.
COTEC Foundation for Technological Innovation, 1997, Innovaciones telemáticas para las empresas de transportes (Telematic innovations for transport enterprises), COTEC Reports About Technological Opportunities, No. 12, COTEC Foundation for Technological Innovation, Madrid.
Escauriaza, M. J.; Tintoré, J. and X. Torres, 2001, Innovación en Servicios (Innovation in Services), COTEC Report No. 19, COTEC Foundation for Technological Innovation, Madrid.
Jacob, M. and A. Bravo, 2001, Estudio exploratorio sobre innovación en el sector turístico balear (Exploratory study about innovation in the Balearic tourist sector), COTEC Report No. 21, COTEC Foundation for Technological Innovation, Madrid.
López-Dolz, D. et al., 2000, 'Recupera S.A', in Muñoz-Seca, B. and J. Riverola (eds): Casos iberoamericanos de innovación en operaciones (Latin-American cases of innovation in operations), Practical Innovation Collection, COTEC Foundation for Technological Innovation, Madrid
Llano, M.A., 2000, 'Santa Fe Beer Factory' in Muñoz-Seca, B. and J. Riverola (eds): Casos iberoamericanos de innovación en operaciones (Latin-American cases of innovation in operations), Practical Innovation Collection ,COTEC Foundation for Technological Innovation, Madrid.
Marcos, José María, 1999, '¿Hay futuro para los correos?. Reflexiones sobre la innovación como elemento para la supervivencia empresarial' ('Is there a future in postal services?. Reflections on innovation as an element of enterprise survival'), Dirección y Organización, No. 21, pp. 177-187.
Martínez, M. A. and C. Pablos, 2001, 'El diseño de procesos virtuales: un modelo de diagnóstico aplicado al sector asegurador español' ('Design of Virtual Processes: A Diagnosis Model Applied to the Insurance Sector'), Alta Dirección, No. 219, pp. 9-23.
Molina, A., 1999, 'Nuevas tecnologías en distribución turística' ('New technologies in tourist distribution'), Distribución y Consumo, Year 9, No. 44, pp. 116-120
Pablo, F. y C. Muñoz, 2001, 'Economía del cine y del sector audiovisual en España' ('The Economics of Cinema and the Audio-Visual Industry in Spain'), Información Comercial Española, No. 792, pp. 124-138.
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Revilla, E.; Torres, X. and M. Jacob, 2001, Innovación tecnológica. Ideas básicas (Technological innovation. Basic ideas), COTEC Report, No. 19, COTEC Foundation for Technological Innovation.
Revuelto, L., 2002, 'Innovación y distribución comercial. Nuevas herramientas para una distribución eficaz' ('Innovation and wholesale distribution. New tools for an effective distribution'), ESIC-Market, vol 111, pp. 75-87.
Riverola, J., 2000, 'Flotel Orellana', in Muñoz-Seca, B. and J. Riverola (eds): Casos iberoamericanos de innovación en operaciones (Latin-American cases of innovation in operations), Practical Innovation Collection, COTEC Foundation for Technological Innovation, Madrid.
Rubalcaba, L. and D. Gago, 2002, 'National versus international effects in regional concentration of European innovative business services', in Miles, I. y M. Miozzo (eds): Trading services in the international economy: the relationship between internationalisation and innovation, Edward Elgar, forthcoming
Sánchez, J. and T. Luque, 2001, 'Evolución del uso del EDI en el sector del la distribución comercial' ('Evolution of EDI usage in the wholesale distribution sector'), Distribución y Consumo, Year 11, No. 56, pp. 5-21.
Vera, D., 2000, 'Mundo Virtual-BVG: www.bvg.fin.ec' ('Virtual World-BVG: www.bvg.fin.ec'), in Muñoz-Seca, B. and J. Riverola (eds): Casos iberoamericanos de innovación en operaciones (Latin-American cases of innovation in operations), Practical Innovation Collection, COTEC Foundation for Technological Innovation, Madrid.