Toward a shared research vision: An NSF-sponsored workshop in San Jose, CA

Where should the next generation of research funding be focused? The shared vision of research content and the instruments for research funding were explored at a workshop we were happy and honored to participate in at the end of March 2017. The workshop emphasized the need for shared vision building and the role of dialogue in it – not only between the research organizations but also with the funding agency.

The workshop was sponsored by the Directorate for Engineering of the National Science Foundation (NSF), which promotes engineering research and education in the US. It was organized by the International Society of Service Innovation Professionals (ISSIP), in collaboration with San Jose State University.

The workshop brought together about 40 industry experts and academic researchers from around the world. There were at least 20 universities represented, about 10 people from research institutes and non-profits, and about 10 people from industry: Accenture, IBM, Cisco, and GE Digital just to mention a few. Also a representative from NSF was there to inspire and co-create with us.

All of us came to explore a long-term, human- technology research agenda that will propel the smart service systems in the future. As can be seen from the visualization of the presentations and discussions, much of the emphasis was on systems – which of course reflects the theme of “smarter service systems”.

ISSIP/NSF Workshop

Visualizing the presentations and discussion of the workshop.

The workshop was a wonderful experience: we got to hear brilliant presentations (for example Henry Chesbrough emphasizing both outside-in and inside-out innovations) and to participate in great discussions toward shared vision and agenda setting. And to conclude: most of the world class examples we saw are something that we have also seen here at VTT, so we can be proud of the quality and foresight of our research!

Kaisa Still Heidi Korhonen ISSIP/NSF Workshop

Kaisa Still (Senior Scientist; Twitter: @stillkaisa)
and Heidi Korhonen (Senior Scientist; Twitter: @korhonenheidi)

See also #ISSIP-NSF at Twitter!

VTT also provides research services in China – why?


I travel a lot in China, where I often meet representatives of Finnish companies. As a VTT employee, my work in China raises a great deal of interest and I am often asked what VTT does in China. The answer to this question is clear: VTT provides research services in China. We do this globally, with the aim of increasing our number of international commercial projects. They enable us to develop our own expertise, remain a world leader in research and fund the maintenance and development of the research infrastructure and activities in Finland. These ultimately form the basis of our services for Finnish customers.

Over the years, VTT has also prepared and led multi-company projects, with the purpose of creating a network with the Chinese and helping Finnish companies to enter the Chinese markets. These projects have been related to areas such as materials technology and smart eco-cities. For example, VTT can verify technologies and their suitability for the Chinese markets, while providing smaller companies with credibility in large and competitive sectors. However, such projects need a funding instrument, from which VTT can source funds for its activities. An example of this lies in the joint funding by Tekes – the Finnish Funding Agency for Innovation and the Chinese Ministry of Science and Technology; this funding has been directly allocated to SMEs in recent years.

So what, then, does VTT do in China? We do not have our own offices or research laboratories there. Our activities in China are project-based, with the practical work being done in Finland or, possibly, in China with the help of a Chinese partner. Without a visible Chinese operation, we cannot make contact with Chinese players, attract delegations to Finland and so on. These actions ultimately generate the contacts that lead to commercial projects and create opportunities for Finnish companies.

How do the Chinese markets look? I would say that they are still very challenging, since companies’ own R&D is a carefully guarded secret. However, market entry is not impossible and some major commercial projects have been ordered directly from China. However, China is no different to countries like Finland in one regard: It is pointless to offer the Chinese basic research or work which they can do themselves. In other words, to do well in China we need to be the best at what we do.

I look forward to the day when the Chinese innovation culture matures and the markets truly open up to R&D services. We will then have access to the world’s largest R&D markets. Until then, we need to be highly visible in China, enhancing recognition of VTT as a reliable and expert research partner.

Timo J. Hakala, D.Sc.
Country Manager, China

Thinking of research as service


Those who fund want to get more from research. What if we start thinking about the funders of our research as customers? And not as just any customer, but customers of a service business? A logical consequence of the change of mindset would be for research entities in general to apply the understanding and methods of those who have been carrying out research specifically on services.

The research community especially in Finland lives in challenging times. After several decades of increased R&D funding, the last few years have seen cuts both to public and private R&D funding. The justification for these cuts has all too often been the claim that we as a research community have not produced enough benefit to society or to industry. From the research side there is a tendency to see value in research in terms of ever increasing opportunities for knowledge, that is, further research is seen as a key output.

What if we change our mindset and explicitly treat research as a service for specific customers or to society at large? This is not a new way of thinking as, for example, within the European Commission, research has been mentioned as a typical Knowledge Intensive Service Business. In the NACE -classification of economic activities, research is also included as a business service. With this mindset it is relevant to start applying what scholars have developed in regard to services in recent years.

One of the hot topics in service research for more than a decade has been the concept of Service-Dominant Logic, originally presented by Stephen Vargo and Robert Lusch in their seminal study in 2004 (instead of the Goods-Dominant Logic typical of product markets). Although work in the study was based on earlier work by several scholars, the article was a real breakthrough and launched an exceptionally strong interest in studying what service is really about. The S-D Logic concept has been further developed by hundreds of researchers and already more than 10 000 papers have made reference to that seminal work. We at VTT had the pleasure of having Stephen Vargo as our Visiting Professor in 2012. A useful summary of the developments is the follow-up study published by Vargo and Lusch this year (2016).

According to Vargo and Lush (2004), the S-D Logic can be characterized as aiming to:

  1. Identify or develop core competences, the fundamental knowledge and skills of an economic entity that represent potential competitive advantage.
  2. Identify other entities (potential customers) that could benefit from these competences.
  3. Cultivate relationships that involve the customers in developing customized, competitively compelling value propositions to meet specific needs.
  4. Gauge marketplace feedback by analyzing financial performance from exchange to learn how to improve the firm’s offering to customers and improve firm performance.

These are all highly valid to a typical research organization. A research group or thematic area can often be taken as an economic entity (irrespective of accounting practices), since the continuation of the work depends on its capability to draw new funding. Even public funding organizations seek societal or economic benefit (cf. in Finland, these discussions led to the establishment of the STN – Strategic Research Council). When writing a research proposal one needs to understand not only the call text, but also the reasoning behind the call. In the case of contracted industrial research, the joint elaboration of the offering with the customer is a must. An ongoing assessment of the financial health of the research group is also needed, as no organization can afford in the long term any entity that is continuously spending more than it is earning.


In the Service-Dominant Logic, the customer is the co-creator of value. One of the foundational premises of the S-D Logic states that “value is co-created by multiple actors, always including the beneficiary”. A research project, by definition, provides a unique solution to the customer or other beneficiaries. The value of the results depends on how they will be used. In basic research, the beneficiary is the relevant research community. There is no value in the work if there is no impact on the work of other researchers. A research project aiming to contribute to the solution of a societal challenge is of value only if it will be used to solve the challenge. A research project is relevant to business only if the results are used by the stakeholders in product, process or service development. Pre-determined research services are also needed, because specified operations like measurements, tests, interviews etc. are also important for, e.g., product development and performance confirmation.

The conclusion from the discussions referred to above is that research can and should be treated more explicitly as service to beneficiaries, that is, to other researchers, to industry, and to society at large.

In practice the change of mindset means that we as researchers need to increase our understanding of the mechanisms of government decision-making as well as the business logic of various industrial ecosystems. Only by properly fitting emerging knowledge and technologies to the realities of existing business and government ecosystems can we get permission to address the challenges, which help our sponsors to create value in their operations. The typical jointly funded public projects need to be seen as service to society or to business ecosystems. The EU, Tekes etc. are not funding research only to support researchers in the research performing organizations. Funding programs exist to have a positive impact on industry and society at large.

Matti Kokkala

Matti Kokkala is currently Senior Advisor, Smart Cities at CTO’s Office of VTT. From 2006 to 2013 he was Vice President, Strategic Research in charge of e.g. VTT’s publicly funded research portfolio on service business and services.

Twitter: @MattiKokkala


Vargo, S. L. & Lusch, R. F. 2004. Evolving to a new dominant logic for marketing. Journal of Marketing, 68(January), 1–17.

Vargo, S. L. & Lusch, R. F. 2016. Institutions and axioms: an extension and update of service-dominant logic. J. of the Acad. Mark. Sci., 44, 5–23.