Service Absorptive Capacity: Its Evolution and Implications for Innovation

The concept of absorptive capacity has been part of the strategy and innovation discourse for a few decades. As industry and business practices have evolved, so has the understanding of the mechanisms responsible for developing and growing the absorptive capacity of contemporary organizations. In this paper, we trace the evolution of this concept and its operationalization and measurement. We particularly investigate how absorptive capacity can be used as a potential anchor of innovation research in service industries. We suggested the conceptualization of a service absorptive capacity and propose different measures that could aid to this conceptualization. We also provide an alternative to the predominant focus on the functional characteristics and research and development practices in innovation studies to date.