Difference Between Product and Service Innovation

Innovation is the process of creating something new, whether it's a product, domain, or service. Product and service innovation differ in their focus, with product innovation concentrating on improving physical appearance and functionality, while service innovation enhances the process of providing customers with value. There are various components that differentiate product and service innovation, including the backstory of developing a product or service, development costs, and risks involved. Product innovation starts with product concepts and requires technology, manufacturing, and a supply chain, with development costs being higher than service innovation. In contrast, service innovation needs a service concept, client interface, and service delivery system, with lower development costs and higher scalability. The development risk is higher in product innovation, but service innovation provides the scope for improvement and development after launch.