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This paper examines some major trends in. and results of. the burgeoning literature on services innovation. It draws substantive conclusions, such as:• Services do innovate, technologically and organisationally, though there are substantial and intelligible differences in innovation propensity and style across different classes of service firm and sector.

• Many services are poorly integrated into innovation networks, for several reasons, but largescale service firms in many service branches do play important roles in orchestrating innovation (mainly through their supply chains), and Knowledge-Intensive Business Services (KIBS) play important roles in facilitating innovation across the economy.• The rise of the service economy is leading to changes in innovation processes more generally. Studies of services innovation help explicate this, while many received (manufacturing-centred) approaches neglect significant phenomena here.• Rather than draw a sharp demarcation between services and manufacturing innovation, study of services innovation throws light on innovation processes across the whole economy.