If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to identify and reflect on a set of dynamic capabilities for managing service innovation and applies a dynamic capabilities view (DCV) of firms for managing service innovation. Design/methodology/approach -This theoretical paper offers a conceptual framework for managing service innovation by proposing six dynamic service innovation capabilities. This framework builds on and is integrated with a model of service innovation that covers the possible dimensions where service innovation can take place. On this basis, avenues for future research into managing service innovation are identified and managerial implications discussed. Findings -The six dynamic service innovation capabilities identified are: signalling user needs and technological options; conceptualising; (un-)bundling; co-producing and orchestrating; scaling and stretching; and learning and adapting. It is hypothesized that successful service innovators, which may include manufacturing firms developing into providers of service solutions, outperform their competitors in at least some of these capabilities.Research limitations/implications -The six dynamic service innovation capabilities identified in this theoretical paper, their mutual links as well as links with dimensions of service innovation need to be tested further. Further refinement is required in order to be able to discriminate between various industries, sizes and types of firms. Practical implications -Those involved in managing service innovation are offered a framework for systematically assessing dynamic service innovation capabilities. Originality/value -The main contribution of this paper is that it links a service (innovation) perspective to a DCV of the firm by proposing a set of six dynamic service innovation capabilities.

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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.