Developing innovative services is vital for economic growth and competitiveness of firms. In order to realise service innovation, companies increasingly reach outside the boundaries of their own organisation. In this manner, they are involving larger parts of their value chain in the innovation activities and turning towards the users for inspiration. To engage with customers in the co-creation process to understand both existing and emerging user needs, the use of living labs has emerged as a new way to build competences, and sustain competitive advantage. Living labs allow for the creation, validation, and testing of new services, business ideas, markets, as well as technologies in real-life environments.
However, empirical investigation about co-creation enablers in living labs is scarce. To fill this gap, this paper analyses factors that facilitate co-creation in living labs. The study integrates findings derived from existing literature with primary data collected at a living lab called JOSEPHS as well as with companies using it. Six critical factors to facilitate co-creation in living labs are identified and discussed. This study offers first insights into the operational activities and design structures which are implemented to facilitate co-creation in living labs. In particular, living labs and companies gain deeper understandings on the factors that are relevant to consider when engaging in co-creation.