The evolution of service innovation in the IT-intensive integrated logistics industry in Hong Kong

Observing some firms in the cargo industry transformed from single-dimensional freight handling service towards IT-intensive integrated logistics service dynamically, this thesis explores the service innovation black box, that is, to find out why and how service innovation evolved in the Hong Kong cargo sector. The objective of conducting this study is to contribute to the development of a service innovation framework. It tests whether Barras' Reverse Product Cycle (RPC) model can explain the development of logistics innovation and how RPC should be adapted to explain the service innovation phenomenon in the logistics industry. The empirical analysis starts from what macro factors shaped and drove the evolution of the cargo industry from a historical perspective. Then, the analysis becomes more detailed and micro-oriented concerning the behavior and interactions of individuals firms. It explores what strategies the individual firm has undertaken to acquire and adapt enabling capabilities. It also explores how firms have kept pace with the latest market requirements so as to launch marketable service products. By placing the empirical findings within RPC model, this empirical research confirms that the concept has to be extended in order to explain the phenomenon. From the industry level perspective, this thesis argues that RPC could explain the development trend of the industry as a whole but it cannot perfectly explain the role of IT throughout the innovation trajectory as well as precisely predicting the central initiator of integrated logistics service. From the firm level perspective, this study suggests that complementary concepts and frameworks have to be applied in conceptualizing service innovation pattern of individual firms. Since co-produced innovation, recombination innovation as well as tailor-made innovation could be verified fiom the firm level investigation, this thesis concludes that interactive approach fits best in complementing RPC in explaining service innovation patterns of individual firms