The Practice of Service Design in Korea : Its Determinants and Performance in Enterprises

다국어 초록 (Multilingual Abstract)

The tendency of servicification is shifting the foundation of industry from technology and suppliers to humans and consumers. As a result, innovation requires new perspectives based on demand side by grasping the behaviors of customers, and service design is attracting attention as an alternative for innovation. This study analyzes what factors prompt an enterprise to use service design and how service design affects firm performance, using survey data in Korea. It is shown that a firm is more likely to use service design if it has an independent design center, employs more designers, reflects customer needs better, and has sufficient design personnel and design infrastructure. This result implies that rather than other innovation factors, direct spending on design is likely to lead firms to implement service design. Design investment has a significantly positive effect on both quantitative and qualitative performance. Furthermore, the effects of design investment on sales, employment, and productivity are greater in firms using service design than in firms that do not. Since our empirical analysis shows that service design has a positive effect on firm’s performance and innovation, government’s policy should focus on encouraging firm’s to apply service design in its management by establishing the infrastructure.

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