Abstract
In order to explain how producer service innovation comes into being, this article has used the framework of functions of innovation systems. By introducing the functions of innovation systems framework, Basing on Shaanxi Silver Balfour empirical practice, this article has illustrated the governmental role in facilitating producer service innovation. Only the functions of regional innovation system interact each other positively, can producer service innovations come into being. The government can play important role in interacting the functions of regional innovation system positively to stimulate producer service innovations. the government can play a key role in the producer services innovations, and especially governmental procurement of services and its policy can induce producer services innovations.
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