the service sector has become one of the most important economic activity in the world economy in both developed and developing economies. services are crucial for further developing the latin american and caribbean countries, providing a strong economic dynamism and creating the source for job creation and welfare. service innovation is incremental for ensuring strong and competitive growth of services in the region. agriculture and manufacturing industries also need service innovation to become more competitive. service innovation shows some particuliarities, distinctive from innovation in goods, such as the relatively less importance of r&d and patents. service innovation policies are justified by a wide range of reasons, including the existence of market and systemic failures. a number of developed and developing countries have recently promoted service innovation policies, following various strategies. both horizontal and vertical policies need to used, together with systemic p...