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Abstract Service innovation now occupies a more prominent position in innovation studies over the last few years, but this has yet to be reflected in an accumulation of knowledge about services in innovation policy. Services innovation is a topic of growing interest for innovation researchers and policy makers alike. This has particularly been so in the last decade, as services have grown to constitute the larger part of employment and output in most industrial countries. The services sectors of these economies are important for their productivity, economic competitiveness, and quality of life. But innovation in services is important for other reasons beyond the economic importance of the sector. First, innovation in services extends beyond the services sectors to affect service activities in all sectors of the economy. Second, some services play central roles in innovation processes throughout the economy.
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