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Innovation in the Service Sector

This initiative by the Samuel Neaman Institute with joint funding of SNI and the Chief Scientist at the Ministry of Industry, Trade and Labor, is designed to examine innovation in the service sector for the first time in Israel.

The service sector represents a large segment, ranging from 70 to 80% of the economic activity of OECD countries. Therefore, it is important to identify the factors that influence growth and innovation in the service sector and to formulate a policy to encourage the implementation of support programs for companies, research, and cooperation in various sectors of this segment. The purpose of the work is to show a clear picture of the characteristics of the services sector and open the door to understanding the issue of innovation in this sector. The final report consists of seven chapters:

  1. 1. Definitions and classifications in the sector of trade and services.
  2. 2. Data indicating the centrality and importance of the service sector in Israel and an international comparison according to the following indices: GDP, employment, services export and business demography, and data regarding innovation in the service sector, based on the indicators of total productivity growth and expenditure on R&D and innovation.
  3. 3. A literature review on innovation in services based on recent works and studies on the characteristics of services innovation, indices, and surveys used in the field, and the necessity and importance of consolidating a policy for the services sector.
  4. 4. A policy that is oriented toward innovation in services, the programs used to advance the field, and an evaluation of the effects of programs in Germany, Finland, Denmark, Iceland, Norway and Sweden.
  5. 5. Review of the existing policies and programs in Israel to promote innovation in the service sector.
  6. 6-7. Summary and Recommendations.