New modes of innovation: How services benefit industry

Despite the significance of services in the economic statistics, economic theories of innovation have tended to ignore them, or to assume that innovation in services consists of little more than adopting innovations developed in industry. Subjects this view to a critique based on three questions: Why is innovation in services misunderstood or neglected in economic theory? What do field observations indicate were the principal forms of innovation in services? How can these observations help to broaden and enrich the economic theory of industrial innovation?