Can service innovation drive economic growth beyond the adoption of industrial advancements? This paper challenges the conventional view that service innovation is merely the adoption of innovations developed in industry. It delves into the specific characteristics of service innovation, exploring how these differ from traditional manufacturing-based models. The research uses field observations to identify key forms of innovation within the service sector, highlighting aspects often overlooked by economic theories. By analyzing these real-world examples, the author reveals how services contribute uniquely to economic statistics. It questions why economic theory often neglects or misunderstands service innovation. Ultimately, this article enriches the economic theory of industrial innovation by incorporating service sector insights. The findings provide a framework for broadening perspectives on innovation, emphasizing the distinct processes and contributions of services to the economy. It proposes a more inclusive model that recognizes the unique dynamics within the service industry, paving the way for new strategies and policies.
Published in the International Journal of Service Industry Management, this paper aligns with the journal's focus on service sector dynamics. By exploring new modes of innovation beyond manufacturing, the study enhances the understanding of competitive advantages and strategic development within service industries. Citations within the journal emphasize the growing recognition of service innovation as a distinct field of study.