Innovation in the U.S. Service Sector

This paper contributes to ard a better understanding of innovation in the service sector by focusing on the disparate nature of R&D in the U.S. service sector as learned through case studies of the U.S. telecommunications, financial services, systems integration services, and research and development testing services industries. Based on this understanding of the nature and scope of R&D therein, a new policy-oriented model of innovation specific to the service sector is posited. Also, policy recommendations are offered with regard to the public sector’s collection and interpretation of R&D data related to the service sector.