See this OECD thing;
Innovation in service activities extends beyond the services sector per se, as it can also be carried out by manufacturing firms. Examples include new channels for customer interaction, new business models or new service applications embedded in manufactured products (e.g. service and maintenance contracts, applications on smartphones). Service innovation often has technological (mainly information technology) and non-technological aspects and does not necessarily rely on R&D. Service innovation is also characterised by proximity to users and customers who often participate in the joint development (or co-creation) of such services.