This is a preliminary work, which aims to create a clear picture of the characteristics of the service sector and to open up understanding of innovation in this sector. The work includes five chapters: The first chapter presents definitions and classifications in the field of trade and services. The second chapter presents key data which point to the centrality and importance of service sector in Israel and in international comparison using measures such as: GDP, employment, export services and demographics, businesses, and data on innovation in the service sector using indicators of R & D and innovation expenditure.
The third chapter presents a literature review based on studies about services innovation in recent years, characteristics of innovations in the services, metrics and surveys used to describe this field and the need for formulating a policy for the service sector.
The fourth chapter describes targeted policies for promoting innovative services, programs designed to advance the field and studies on the evaluation the impact of these programs in countries: Germany, Finland, Denmark, Iceland, Norway and Sweden.
The fifth chapter is a review of existing policies and programs in promoting innovation in the service sector in Israel.
The sixth and seventh chapters present summary and recommendations.
