Governments of most developed countries are spending billions of dollars on innovation to improve the quality of life of their citizens as well as to make their local industries more competitive in a Flat World. Most countries including India are seeing a growing services-sector contribution to GDP. For example, in the U.S. 84 percent of all the businesses are in services industries and accounted for nearly 85 percent of U.S. employment. Although the service sector in India does not have as large a proportion of GDP, its contribution has been growing rapidly. In 2005 the agriculture sector contributed to 24 percent of GDP, manufacturing contributed 31 percent and the service sector contributed to about 45 percent of the GDP. Hence it is important to focus efforts on Services Innovation as well.

Services Innovation is mainly about creating newer experiences for the consumer using new technology, changed processes and more importantly, improved human factors. It is the design and delivery of new services, more efficiently in a fail-proof manner.
Information and Communication Technologies (ICT) have been great enablers of Service Innovation. “Self Service”, one of the best service innovations has been made possible mainly because of advances in ICT.

Services meant innovative use of the technology for automation, efficiency and productivity improvement. Most ICT users are now trying to leverage technology for creating new and unique experiences for their customers. So the expectation from technology is not only efficiency and productivity but design and creation of innovative new services as well. Professional services companies including IT services and solutions providers have a great opportunity to spearhead these innovation services.

The growing global services economy offers several opportunities. For instance, by 2030 it is estimated that the working population as a percentage of total population in most countries will be on the decline. In India it will continue to go up. So, innovative Elderly Care will be a much-needed service in many countries.

Design services will be another major opportunity, as an increasing need for customized products and services will necessitate shorter product cycles and a need for flexibility. Consumer goods such as cell phones, automobiles, and fashion accessories and tourism offer ample exemplification of these opportunities.