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RE-THINKING GOVERNANCE: THE ROLE OF SERVICE INNOVATION

Reframing innovation is coherent with social evolution. This means we have to interpret the transformation of business on the basis of two approaches (Prahalad and Krishnan, 2008):1)personalized experience, defined in the market led evolution of innovation (Pexp);2)access of resources, defined in the socially led evolution of innovation (Ra).According to the first approach, competitive advantage of differentiation has led companies to move towards the centrality of the Individual and focus on its experience at a time to improve customization.In symbol, optimum is Pexp = 1.Unfortunately, the breadth of the markets - induced by globalization and pervasiveness of ICTs - does not admit that any business entity, no matter how great and efficient it is, is not by itself able to interpret alone the first approach. This means that we need to rethink the business from the outsourcing perspective or move the focus on the ability to access resources and not necessarily to the allocation /ownership of resources themselves. In symbol, optimum is Ra = Gr. Neoclassical theory (Smith, 1990; Guston, 2000) explains production performance and competitive advantage of firms in terms of their relative resource endowments (Hall, 1994), while the role of knowledge was seen as exogenous to the production system (Freeman, 1995). The emergence of the ecological paradigm (Freeman, 1991; Lundvall, 1992) has shifted the focus on innovation systems justified by the triple helix model (Etzkowitz and Leydesdorff, 1997) based on university-business-government relations. This model is interactive and virtuous for innovation, it is designed as well as sinergic recursive interaction between three institutions traditionally isolated, but now necessarily have to be connected in a cross-institutional relations (Sutz, 1997). According to the model, in local service systems, while government plays a coordinating role in social development and local networks - regional leaders - the bridge university-business emphasis the concept of academic entrepreneurship focused on the processes of generation, accumulation and implementation of Knowledge for Innovation and Development (Chatterton and Goddard, 2000). Functionality and applicability of the model propeller lies in the ability to interpret innovation in the light of: 1) local/regional network of companies and other organizations in a limited geographical area; complementary industries, availability of a stock of social capital/human governance collaborative based on trust and cooperation between actors (Lundvall and Johnson 1994; Niosi and Bas, 2001). The configuration of the triple helix and the excellent Pexp = 1 and Ra = Gr refers to a smart governance structure and dynamics of the relation between the actors university-government-business (Piciocchi et al., 2012). In nested social networks, -whether governance can be considered as the result of a continuous transformation of the governance structure and practices according to functional the new business and societal liberalism; -whether Service Systems are: a) dynamic configuration of resources, b) a set of value co-creation mechanism between suitable entities, c) an application of competencies -skills -knowledge any person (s) in job roles or stakeholders, d) an adaptive internal organization responding to the dynamic external environment, d) ensure mutual learning and feedback to benefits or outcomes of value co-creation , etc. ) to enable complex viable structure to respond to environmental change, where environmental change is mostly generated by other systems viable, then Smart Mechanism of Governance (SMG) to assess skills and expectations mediated human needs a conceptual re- interpretation of government as an institution (structure) as well as practice (system) according to functional new deal of governance in service systems as we called governmentality (Foucault, 1991).