Abstract
The growing cost and demand of healthcare is a major concern globally. Service innovation has been put forward as a top priority to address the challenges of healthcare. However, the concept of service innovation is poorly understood, in particular the differences between incremental and radical service innovation. The chapter makes two important contributions. Firstly, it conceptualizes incremental and radical service innovation based on internal and external changes; in particular, it identifies four types of service innovations. Secondly, it explores the effects and diffusion processes of service innovation. It aids practitioners and researchers to understand radical service innovation in a new way and to shed light on effects and diffusion of service innovation in healthcare.
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