Much of the strategic innovation in service industries can be understood in the context of the shifting boundaries between companies and between firms and their customers. We identify three phases of innovation in modern service industries. All three enabled and triggered by advancements in information technology. The current phase of Service Innovation 3.0 is characterized by open networks between firms and between firms and customers. The paper ends by highlighting a number of dilemmas linked to the challenges of managing service innovation successfully in a world of shifting boundaries and exploding service systems.
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