The Sole Function of University Libraries Is Service Innovation

Zhang Yongcheng¹, Hao Dongdong², Song Yipin¹, Wang Jiamu¹
(1. School of Business, Shandong University, Weihai, Shandong 264209;
2. Library of Harbin Institute of Technology (Weihai), Weihai, Shandong 264209)

Abstract: A university library is a service production function composed of management, resources, functions, and innovative spirit. Its sole function is service innovation. Service innovation represents the organic coupling of librarian creativity with reader demand characteristics—it is the union of these two elements. The clearer one's grasp of the first principles and underlying logic of service innovation, the more effective the coupling, and the more concise and efficient the innovation becomes. The organizational forms of university library service innovation include library organization, service innovation alliances, reader toolboxes, service innovation networks, and service innovation ecosystems. Through service innovation, libraries alter their service cost curves, seek dynamic efficiency, effectively meet reader needs, and thereby demonstrate the market legitimacy of their existence.

Keywords: university library; function; service innovation

1 Introduction

The pioneer of library science, Martin Schrettinger (1834), first defined the library as a vast collection of books designed to rapidly satisfy all literature needs [1]. S.R. Ranganathan (1931) argued that readers are the service objects of libraries, and all library work must revolve around reader demands. The principle of "readers first" cannot remain mere rhetoric but must permeate every aspect of library operations to save readers' time and enhance service efficiency [2]. Pierce Butler (1933) viewed books as a social mechanism for preserving human memory and libraries as a social device for transplanting that memory into the consciousness of living individuals [3]. Scholars universally emphasize reader sovereignty or choice, asserting that libraries exist to serve readers, and that this "service" or "transplantation" process must be "rapid," "time-saving," and "efficient" to "satisfy all literature needs." Readers evaluate all front-end library work through the final service they receive, voting with their feet or wallets, thereby driving the reallocation of service resources and optimization of service activities. How, then, can libraries meet readers' constantly evolving needs at low cost, high efficiency, and high quality? Ranganathan offered only an abstract answer: a library is a growing organism with all the attributes of living growth; an organism that ceases to grow becomes rigid and eventually dies [4].

2 The Value of Service Innovation

A snake that does not shed its skin faces certain death. As part of the university innovation system, university libraries are no different. To transform and renew themselves, they must continuously metabolize their mindsets, concepts, and thinking, regularly "stepping out of the room" and "imagining what lies beyond the mountain." Through openness, inclusiveness, and collaborative innovation, libraries can reduce internally generated entropy, iterate upon past traditions, successes, and experiences, and drive "structural changes" in library services or operations [5].

2.1 The Offline Service Cost Curve

From an economic perspective, the short-run average service cost curve for traditional offline library operations exhibits a U-shape, as shown in [FIGURE:1]. This occurs because marginal returns first increase and then decrease after reaching optimal scale. Specifically, as service scale expands, the fixed costs of technology, space, and equipment are spread over more units of service, reducing per-unit fixed costs. Bulk purchasing of books and materials yields greater discounts, lowering per-unit variable costs. Division of labor, collaboration, and learning effects enhance service efficiency and reduce per-unit service costs, creating economies of scale. At the optimal service scale, total per-unit costs are minimized—the best possible outcome given existing service technology and management capabilities. Beyond this point, further expansion disrupts internal division of labor, encounters technological bottlenecks, and exceeds management resources and capabilities (the Penrose management constraint), leading to service process disorder, reduced efficiency, and rising per-unit costs—manifesting as diseconomies of scale.

By promoting craftsmanship spirit and achieving transformative refinement in service technology and management methods, libraries can continuously shift the short-run average service cost curve downward and to the right, gradually forming a long-run average service cost curve (the envelope curve). When long-run optimal service scale is reached, both service technology and management levels have hit their "ceiling"—the maximum possible for the library. At this juncture, libraries must embrace innovative spirit, break existing constraints, leave the "track" for the "wilderness," and switch "race tracks" rather than merely optimizing "road conditions." Through service innovation, they must enter entirely new service domains, creating a new service cost curve to achieve "what others don't have." As other libraries follow suit, the pioneering library can employ incremental service innovation to refine the "track," optimize the new service cost curve, achieve "what others have, we do better," and gradually form new constraints.

2.2 The Online Service Cost Curve

Through online service innovation, university libraries can fundamentally rewrite their service cost curves. Due to widespread application of internet and digital intelligence technologies, online services partially replace offline services. Although initial development or procurement costs for online platforms may be substantial, subsequent annual operation and maintenance costs remain relatively stable. With massive reader participation and cost-sharing, the marginal cost of expanding online service scale gradually approaches zero, and the long-run average service cost continues to decline—though at a slower rate than long-run marginal cost—also eventually approaching zero (but never reaching it). Similarly, the cost curves of NSTL and commercial database companies follow this pattern, representing the fruits of service innovation, as shown in [FIGURE:2].

A university library is co-created by internal and external stakeholders including the university, librarians, readers, database companies, booksellers, and journal publishers, while simultaneously creating and shaping all these stakeholders. Through this mutual creation process, they achieve coordinated development, mutual benefit, and symbiosis. The existence of a university library requires two forms of legitimacy: first, social legitimacy—it must be established and operate in accordance with laws and regulations, without violating social or professional ethics; second, market legitimacy—service outcomes must be effective, satisfying stakeholders centered on readers (a necessary condition, altruistic), and service processes must be efficient, ensuring service costs remain below social benefits (a sufficient condition, self-interested). This process essentially manifests Adam Smith's "invisible hand." Social legitimacy generally poses no problem for university libraries, so how can they ensure market legitimacy in an era of reader sovereignty? The only path is continuous service innovation. By promoting innovative spirit to create and refine new service cost curves, and craftsmanship spirit to shift short-run cost curves downward, libraries create value for readers, opportunities for librarians, and fulfill responsibilities for the university. In other words, service innovation is a concrete manifestation of university libraries' social responsibility and their only way forward. Since university libraries are created by stakeholders, service innovation is ultimately for those same stakeholders.

3 The Basic Logic of Service Innovation

Service innovation is creative destruction that breaks the "circular flow." It is a process of discovery—discovering reader needs, service product genes, and service technology codes; a process of realization—connecting reader needs, service products, and service technologies to create new services; and a process of creating scarcity—achieving "what others don't have" or "what others have, we do better," providing new services, meeting new needs, and establishing new advantages.

3.1 First Principles

The multifaceted complexity exhibited by all things in the world can only be activated by the clearest cognition and freedom through essence. Early philosophers enjoyed digging to the root, hoping to obtain a logical origin or first principle of a thing to explain the objective world—the origin of all things and their basic composition. First principles involve tracing back to the source,追溯ing to the most fundamental stage and the most basic units of causal factors at each stage, exploring the essence or truth of things. The philosophical concept was proposed by Aristotle. "Firstness" or origin has two dimensions of meaning: first, the meta (Meta-) in spatial dimension—the most basic unit constituting things. For example, Thales believed water was the basic unit of all things, Pythagoras held that number was the origin, and Heraclitus proposed fire as the origin. Second, the source in temporal dimension—追溯ing to the most basic premise of existence. In other words, within every system, including service innovation, there exists a most fundamental, self-evident proposition or assumption that cannot be violated, omitted, or deleted, nor derived from any other proposition or assumption. For instance, Laozi believed that Dao is the most primitive and fundamental existence in the universe, the most fundamental driving force of change, and the destination of all things. Cheng Yi and Zhu Xi believed that Li (principle) is the origin of all things—where there is a thing, there is a principle; humans can neither add to nor subtract from Li [6]. Wang Yangming further argued that the mind is Li. Without mind, there is no Li; the mind legislates for the universe, and Li is established by the mind [7].

3.2 Underlying Logic

Underlying logic refers to the objective, intrinsic, essential, and necessary connections between causal things. It is the rules and procedures that logically link the "first principles" of different causal things from the essence of a single thing. For example, when sodium bicarbonate is added to dilute hydrochloric acid, gas is produced; the underlying logic is H⁺ + HCO₃⁻ = CO₂↑ + H₂O.

First principles represent the thinking mode for analyzing problems, while underlying logic provides the rules and procedures for solving them. The more reliable the "firstness," essence, or truth, the more robust the underlying logic; the more robust the underlying logic and the better it integrates with specific contexts, the stronger the problem-solving capability. Service innovation is a continuous process of deconstruction, reduction, and reconstruction. Deconstruction is the premise; construction is the purpose. Deconstruction aims to explore and restore the essence or truth of things, while construction involves understanding the internal connections between causal things from a holistic perspective to create new services. During the deconstruction/discovery and construction/implementation processes, it is crucial to avoid fallacies of division and composition—preventing both "misdiagnosing the illness" and "prescribing the wrong medicine."

For university library service innovation, first, following first principles involves, on one hand, reverse追溯ing reader needs to trace service demands, technical needs, and even theoretical requirements; on the other hand, vertically deconstructing reader needs, service needs, and technical needs to discover their basic structures and specific characteristics. Second, combining the spatial dimension "first principles" of technical needs, service needs, and reader needs to identify the rules and procedures of their internal connections—that is, discovering the underlying logic of service innovation. Third, integrating specific service innovation contexts to conduct overall and detailed service innovation design, followed by service technology integration and service product integration to creatively meet reader needs, as shown in [FIGURE:3].

Service innovation must accurately understand readers' intentions and precisely respond to their needs, forming a closed-loop service innovation logic that creates shared value through dynamic feedback and iteration. Reader needs are the starting point, endpoint, and "first principle" of service innovation—the mother of service innovation—while librarian creativity is the father. Service innovation is the process of perceiving, responding to, and connecting librarian creativity with reader demand characteristics; it is the "union of the two." The more accurate the understanding of first principles and underlying logic, the simpler the design and implementation, the better the coupling, and the more effective the service innovation.

4 The "Trilogy" of Service Innovation

[FIGURE:3] The Basic Logic of University Library Service Innovation

A service innovation typically undergoes three stages: breakthrough service innovation, incremental service innovation, and service maintenance. Breakthrough service innovation constructs a complete monopoly advantage of "what others don't have," incremental service innovation builds a competitive monopoly advantage of "what others have, we do better," and the maintenance stage reduces service costs, improves efficiency, and enhances quality through standardization to meet more readers' standardized needs and achieve good social benefits.

4.1 Breakthrough Service Innovation

Breakthrough service innovation focuses on the long-term vision, promoting innovative spirit to break existing constraints and fundamentally alter current service theories, technologies, and products. It represents true 0-to-1 creation, with characteristics of long cycles, non-linearity, and discontinuity—for example, transitioning from print to electronic resources, from offline to online consultation, or from intra-library to inter-library loan. It is a functional transformation (what to do) that enters entirely new service domains, opens up "blue oceans" and new "race tracks," and seeks dynamic efficiency [8]. At this stage, service standardization is insufficient, initial users are often niche, continuous innovation investment is required, and social benefits are not yet ideal.

4.2 Incremental Service Innovation

Incremental service innovation focuses on the near-term vision, promoting innovative spirit to refine and improve existing service theories, technologies, and products along the path of breakthrough innovation. It is the process from 1 to N—for example, increasing the per-person book borrowing limit from 10 to 20 volumes—with characteristics of gradualness, continuity, and cumulativeness. It emphasizes performance enhancement (how to do it better), including improvements in reliability, security, and immediacy, gradually optimizing "deep blue" into "light blue," refining the new "race track," and seeking dynamic efficiency. At this stage, services become increasingly standardized, gain recognition from more readers, begin to generate stable social returns, and gradually form new constraints.

4.3 Service Maintenance

The service maintenance stage focuses on the present vision, promoting craftsmanship spirit to reduce costs, improve efficiency, and enhance quality through internal potential挖掘, resource conservation, and intensive cultivation under given service technology and management conditions. It is the process from 1 to 1'… from N to N', optimizing "road conditions" and seeking static efficiency. At this stage, services are standardized and scaled, gaining widespread reader recognition and good social benefits, but development trends dictate that existing services will eventually become a "red ocean" where maintenance becomes unsustainable, as shown in [FIGURE:4].

[FIGURE:4] The "Trilogy" of University Library Service Innovation

One cannot have one's cake and eat it too. Pursuing service innovation and differentiation sacrifices service quality, efficiency, and cost-effectiveness, resulting in niche audiences; pursuing high quality, efficiency, and low costs to win broader reader favor means standardization and inability to meet new demands. Without breakthrough service innovation, libraries cannot pioneer new territories and build genuine advantages; without incremental service innovation, they cannot solidify those advantages; without service maintenance, they waste enormous innovation costs and fail to achieve service scalability and economy. Overemphasizing breakthrough innovation leads to high investment and low returns, ultimately breaking the library itself; overemphasizing incremental innovation traps libraries in the "innovator's dilemma" [9]; overemphasizing maintenance ultimately leads to lost advantages. Sociologist Gustave Le Bon argued that humanity's two great tasks after its birth were first to construct tradition, then destroy it when its benefits were exhausted. Without tradition there is no civilization; without destroying these traditions, society cannot progress. The difficulty lies in finding a good balance between stability and change [10]. Therefore, university libraries must seek dynamic balance between service innovation and maintenance, and between breakthrough and incremental innovation—pursuing both dynamic efficiency to create and consolidate new advantages, and static efficiency to exhaust the benefits of service innovation.

5 Organizational Forms of Service Innovation

As service demands become more personalized, diversified, and digital-intelligent, service innovation grows more complex, costly, and risky. University libraries' own innovation capabilities and potential prove insufficient, while innovation resources are widely dispersed yet available. These internal and external factors have driven the evolution of organizational forms for university library service innovation, roughly progressing through library organization, service innovation alliances, reader toolboxes, service innovation networks, and service innovation ecosystems. A detailed comparison of these types appears in [TABLE:1].

[TABLE:1] Comparison of University Library Service Innovation Organizational Forms

Form Innovation Orientation Relationship Between Library and Stakeholders Openness Innovation Effectiveness Library Organization Library sovereignty Library + books/suppliers Closed Low efficiency, high cost, poor quality Service Innovation Alliance Reader sovereignty Library + libraries + stakeholders Specific openness Complementary advantages, high effectiveness; high interface friction, high management cost Reader Toolbox Reader sovereignty Library + ubiquitous readers Selective moderate openness Innovation demand-supply integration, high effectiveness, sustainable Service Innovation Network Reader sovereignty Library + stakeholders Cooperative, mutually beneficial High effectiveness, high interface friction, high management cost Service Innovation Ecosystem Reader sovereignty Library + stakeholders Highly open Innovation demand-supply integration, high effectiveness, sustainable

5.1 Library Organization

Initially, service innovation depended entirely on the library organization itself, adopting a closed innovation model where resources and capabilities were completely internal, activities were conducted entirely within the library, and outcomes were applied only internally. This paradigm existed primarily before the third industrial revolution, when university libraries monopolized print resources, innovation was slow, service technology was relatively backward, and readers had few alternative knowledge access channels, emphasizing library sovereignty.

5.2 Service Innovation Alliance

After the third industrial revolution, social division of labor and specialization became increasingly pronounced. No library could monopolize all information, technology, or services. As reader demands grew more diverse and personalized, libraries of comparable strength with close relationships and weak competition, as well as libraries and resource suppliers, began forming various service innovation alliances. These alliances shared resources and collaborated on innovation for specific service projects to effectively meet reader needs. Service innovation alliances are typically task- or project-oriented, with few members and strong ties among them. When the task or project goals are achieved, the alliance may be renewed or dissolved immediately.

5.3 Reader Toolbox

The popularization of network information technology has made reader innovation possible. University libraries no longer need to strive to understand reader needs; instead, they can provide readers with a technical toolbox, allowing them to develop needed services through trial and error—from minor modifications to major innovations. For example, libraries can disclose thesis verification processes, search tools, and techniques, enabling readers to conduct self-verification while the library merely confirms results. In this model, readers develop, test, and experience new services themselves, while libraries only provide technical support. Service innovation is反向contracted to readers, transforming libraries from traditional service innovation agents into technical supporters. The interface between them shifts from service to technology, with corresponding changes in responsibilities, blurring the roles of supply and demand in service innovation.

5.4 Service Innovation Network

After 2000, the widespread普及 of network information technology provided tremendous convenience for cross-organizational connections and collaborative innovation. University libraries gradually connected with more external stakeholders, forming service innovation networks that offered opportunities for collective learning, complementary innovation resources, optimized innovation resource integration mechanisms, and shared innovation risks/costs, further enhancing service innovation effectiveness. In this organizational form, lead users (early adopters or rejecters) typically participate to provide demand information, solutions, and user experience, reducing service development costs.

5.5 Service Innovation Ecosystem

The service innovation ecosystem is an organic unity aimed at sustainable service innovation, featuring ecological member relationships and systematic innovation activities. It represents Service Innovation 3.0 (fusion-oriented ecological systematic innovation), building upon Service Innovation 1.0 (library-oriented closed innovation) and Service Innovation 2.0 (reader-oriented open innovation). It organically integrates the advantages of service innovation alliances, reader toolboxes, and service innovation networks while effectively overcoming their shortcomings: lack of innovation resources, various interface frictions among members, and insufficient mechanisms for integrating and utilizing innovation resources. It provides a user-friendly, sustainable, holistic solution for addressing various service innovation challenges.

In summary, university libraries must integratively apply various emerging technologies, open their mindsets, organizational boundaries, and internal innovation processes, establish connections with increasingly more external stakeholders, employ multiple innovation organizational forms simultaneously, and collaborate to systematically solve service innovation challenges and effectively meet readers' new demands.

6 The Internal Driving Force of Service Innovation

A university library is a physical transformation institution and team service production mode that converts inputs into service outputs. Its service production function can be expressed as: Q = f(M, R, F, I), where Q represents service output, and M, R, F, and I refer to management, resources (including books, space, technology, etc.), functions (including strategy, culture, systems, mechanisms, structure), and innovative spirit, respectively [11]. Schumpeter argued that innovation involves introducing new production functions to create new combinations [12]. Thus, library service innovation involves promoting the innovative spirit of all librarians (especially library leaders) to introduce new service production functions by transforming or resetting resources, functions, or management. This includes three forms: introducing new elements (such as AI technology or immersive technology), creating new combinations (such as space reconfiguration), or both introducing new elements and creating new combinations (such as implementing library strategic planning), to seek dynamic efficiency or innovation efficiency that breaks the "circular flow" and effectively meet the needs of internal and external stakeholders centered on readers.

Without innovation, libraries cannot establish new advantages or meet new demands, and thus cannot demonstrate their market legitimacy. Maintenance will ultimately prove unsustainable. The sole function (mission, value, meaning, or historical responsibility) of university libraries is service innovation—to overturn tradition, break the status quo, and open up the future. How, then, can university libraries specifically introduce or generate new elements? How can they create new combinations to change the service production function and implement creative destruction? (1) At the leadership level, measures to promote and implement service innovation mainly include: formulating reasonable library business plans; designing and transforming the library's vision, mission, and core values; designing and transforming the library's functional system; expanding library space resources; absorbing useful external books, emerging technologies, and excellent librarians; optimizing the allocation and utilization of various existing internal resources such as librarians, books, space, and technology; and discovering, nurturing, stimulating, and releasing librarians' creativity, transforming potential creativity into actual creative output and service innovation outcomes [13]. (2) At the organizational function level, main measures include: in terms of systems, implementing standardization, proceduralization, and standardization for routine work to emphasize scientific management, while simplifying administration and delegating power for innovative exceptional work to advocate humanism, enabling librarians to "follow their inclinations without transgressing boundaries"; in terms of structure, placing the right people in suitable positions, reasonably matching responsibilities, rights, and interests, actively promoting decentralization, and adopting new task structures such as project teams and network groups; in terms of culture, promoting learning-oriented and humanistic cultures to create a relaxed and free innovation atmosphere; in terms of mechanisms, improving and strictly implementing training, evaluation, and reward-punishment mechanisms. (3) At the individual librarian level, main measures include: advocating individualism and self-management, expanding librarian autonomy, highlighting spontaneous order, and enhancing individual independence, autonomy, and freedom to discover and cultivate individual interests, hobbies, and specialties. Indeed, throughout the entire librarian corps, the library director, as the leader of the university library, engages in the most uncertain exceptional work whether in foresight or discovery, overall planning or organization and implementation, and is thus the most creative and most in need of entrepreneurial spirit. Moreover, the director influences organizational functions and library business planning, playing an extremely important role in promoting and implementing service innovation.

In conclusion, service innovation is both a process and product of freedom, requiring a relaxed foundational environment, good service innovation mechanisms, excellent librarians, and outstanding leaders. It requires favorable conditions; when conditions are sufficient, service innovation will naturally occur. Service innovation is the flower of freedom and the fruit of civilization.

7 Conclusion

From print to electronic resources, from physical to virtual-physical spaces, from manual to automated, intelligent, and digital-intelligent service technologies—the history of university library development is a history of continuous service innovation. The future has arrived, and the digital-intelligent trend presents numerous challenges and opportunities for university library operations. Various new technology-based service institutions have emerged in large numbers; some university libraries have outsourced their operations or directly renamed themselves information centers, and the status of libraries within universities is becoming increasingly marginalized. Only through continuous service innovation can libraries reduce costs, improve efficiency, enhance quality, meet readers' evolving needs, elevate their influence and voice, and solidify the practical foundation for the legitimacy of library science as a discipline.

The basic assumption of university library service innovation is environmental uncertainty—what exists has become or will become obsolete. The working foundation is the planned, systematic elimination of old, declining, and outdated elements, never defending the past (success). The basic prerequisites are freedom, funding, leisure, and intellectual interest—only thus can the purity of service innovation work, the diversity of innovation thinking, and the trial-and-error nature of innovation practice be maintained. The most underlying logic is respecting human nature of librarians, respecting facts inside and outside the university library, respecting the logic of service innovation, and respecting the basic laws of service innovation—in other words, respecting all objective existence related to library service innovation. Although the ultimate success of service innovation is tempting, the process is fraught with uncertainty, generates substantial opportunity costs and sunk costs, and most likely ends in failure. Therefore, systematic planning is needed to create a favorable service innovation environment, stimulate and release librarian creativity, employ multiple service innovation methods simultaneously, and manage service innovation risks.

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