Conceptual Framework of Service Innovation: A Literature Review

The impact of services in every economy is quite substantial. Increased uses of information technology in sectors like health, education, etc. and globalization has helped in the expansion of service sector necessitating the need for innovation. However, the inherent characteristics of services make service innovation more difficult and challenging than product innovation. Hence, an attempt has been made in this paper to help understand the conceptual framework of service innovation by reviewing the studies conducted in the related subject matter. The paper discusses several definitions of service innovation as given by past researchers, its unique characteristics, its types as derived from Den Hertog's typology as well as the internal and external motives for the firms to innovate their offerings to the market. This paper also discusses in brief the three dimensions of service innovation.