Service innovation capability: a systematic literature review and research agenda

ABSTRACT Though singular or discrete service innovations are accepted as essential to the performance and survival of organizations, practitioners and researchers are increasingly directing their attention towards the firm-level capability that underlies their repeated and continuous introduction, commonly referred to as service innovation capability (SIC). However, compared to the rich body of literature on the innovation capability of manufacturers and industrial organizations, SIC is poorly understood by managers and service researchers and there is no consensus on its definition, antecedents, outcomes, or dimensions. This study remedies this protracted gap through a comprehensive review of 45 academic journals reporting on firm-level studies of SIC using the SPAR-4-SLR protocol. These were found in the Web of Science and Scopus databases and analyzed according to the TCCM framework. Our research provides new theoretical and managerial insights, advancing a consolidated original definition of SIC, reconciles and organizes factors in SIC’s nomological network advanced by disparate studies and synthesizes links between them in an integrating framework, and makes 13 propositions for advancing this topic based on the research gaps identified.


Introduction
The service sector is the fastest growing and largest sector in both developed and developing economies (Song et al., 2022), where it can account for up to three quarters of gross domestic product (GDP) and employment (Akbarjonovna, 2022).Consequently, service innovations, new or significantly improved services, are regarded as a strategic imperative to most organizations as they are critical to their continued prosperity and survival (Perks & Riihela, 2004).Though there has been acknowledgement of the value of singular or discrete service innovations, including those by manufacturing firms (Daugherty et al., 2011), rapid changes in customer demands and increased competition, necessitate their repeated generation (Kindström et al., 2013).As a result, the attention of practitioners and researchers has progressively become directed towards a deeper factor.This is the firm-level capability underlying their continuous introduction, commonly referred to as service innovation capability (SIC) (Wu & Nguyen, 2019).
While this capability has been linked to service innovation performance (Plattfaut et al., 2015), effectively responding to customer's demands (Pöppelbuß et al., 2011), and sustainable organizational performance (Yasmeen et al., 2019); meaning its mastery is of considerable concern to organizations; due to the use of numerous perspectives and definitions of SIC, the literature is characterized by mixed findings.This issue is thrown into particularly stark relief when comparisons are made to the rich body of literature on the innovation capability of manufacturers or industrial organizations (Mendoza-Silva, 2021).The contrast between these disciplines is a legacy issue, partly attributable to when manufacturing was the dominant economic activity (Giannopoulou et al., 2011), and necessitates new conceptual insights for SIC that account for its unique characteristics.Specifically, compared to goods, services are 'intangible, heterogeneous, nonstockable and coproduced with clients' and research and development (R&D) activities are less applicable, or not relevant, to services (Janssen et al., 2015, p. 798).The implication of these differences is that existing innovation theories can't be simply transposed to a service setting (Lillis et al., 2015) and that original research is required to deepen understanding of SIC at the firm level where there is a lack of consensus regarding its definition, antecedents, outcomes, and dimensions.Though several recent literature reviews have focused on innovation capability in a manufacturing context (Iddris, 2016;Mendoza-Silva, 2021;Saunila, 2020), no systematic study of SIC literature has yet taken place that provides a comprehensive overview of this fragmented topic or offers a clear agenda for future research.
To fill this void, this study presents a systematic examination of SIC literature.It makes the following contributions.First, we map this emerging field of research and offer clear and pertinent avenues for holistic future research.Second, we advance existing literature by reporting a parsimonious new organizing framework.Hulland and Houston (2020) recommend such a framework to guide the integration of inductively identified themes, and we utilize this approach to synthesize categories of antecedents, dimensions, mediators and moderators, and outcomes related to SIC found in the literature.Finally, the article advances current knowledge on SIC by offering a novel and original definition which integrates and consolidates 31 existing conceptualizations.It is anticipated that this research will provide scholars with a useful foundation and suggestions for advancing the topic and practitioners with practical tips for enhancing their organization's SIC and a preview of what they can expect from future studies.The contributions of this research are summarized in Table 6.
Our specific focus is on SIC from the perspective of firms.This is a salient topic as evidenced by the inclusion of 45 papers in our review through the Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR-4-SLR) protocol (Paul et al., 2021).A framework-based approach is adopted for analysis, utilizing the TCCM framework advanced by Paul and Rosado-Serrano (2019, p. 842) 'in which T stands for theory, C for context, C for characteristics and M for methodology,' as it is widely regarded useful to reviews that endeavor to make a theoretical contribution to knowledge on a topic (Ameen et al., 2022).
The rest of this paper is structured as follows.The following section provides an overview of the data and methods used in this research.We then present our findings from 45 journal papers organized according to the TCCM framework.A discussion of our findings is then presented, including our original definition, organizing framework, and knowledge gaps in each of the TCCM themes are used to propose impactful future research directions.Finally, conclusions are drawn while acknowledging the limitations of this study.

Materials and methods
In order to report our literature review transparently, we adhered to the SPAR-4-SLR protocol (Paul et al., 2021).While alternative methodologies for conducting literature reviews are available, such as PRISMA or PRISMA-P, these approaches are more descriptive and are not as useful to a study that aims to contribute to theory (Paul et al., 2021).The SPAR-4-SLR protocol consists of three stages, depicted in Figure 1.These stages, Assembling, Arranging, and Assessing, consist of six substages: identification, acquisition, organization, purification, evaluation, and reporting, which allow scholars to justify the rationale behind review decisions and strengthen methodological rigor (Lim et al., 2022).
This review is a combination of a domain-based review (Lim et al., 2022) and a framework-based review (Paul & Benito, 2018).The framework-based approach was selected for this study, in favor of other systematic approaches, as it facilitated flexibility in how the research was conducted, while providing structure and transparency (Paul & Criado, 2020).

Assembling
For the first stage, assembling, we chose to utilize peer-reviewed early access and published research articles that were indexed by Web of Science (WoS) and Scopus.These databases were chosen as they are the two largest databases of scientific articles (Kraus et al., 2022).Books, book chapters, conference papers, and working papers were not included as they either rarely make a significant contribution to scholarly advancement in a domain or do not receive the same level of evaluation as journal articles (Lim et al., 2021).As this is a nascent field of research, in order to include the maximum number of publications, no specifications were imposed regarding the source quality of journals (Akhmedova et al., 2021).
All fields were searched in the two databases using the Boolean operators 'OR' and 'AND' for early access articles and research articles in English, published between January 2000 and July 2022, using the terms: 'service* innovation capa*', 'capacity to innovate AND service*', 'innovativeness AND service*', and 'service firm innovation capa*', Figure 1.Implementation of the systematic literature review according to the SPAR-4-SLR protocol (Paul et al., 2021).
where the asterisk (*) can represent any character(s) or none.These keywords were developed through the careful reading of scholarly documents.The search returned a total of 108 articles: 47 in WoS and 61 in Scopus.

Arranging
In the second stage, arranging, we coded and organized the articles according to the TCCM framework advanced by Paul and Rosado-Serrano (2019).TCCM stands for theory, context, characteristics (including definitions, antecedents, mediators and moderators, outcomes, and dimensions), and methodology (Paul & Rosado-Serrano, 2019).Analysis guided by this framework allows researchers to recognize gaps in previous studies and identify pathways for advancing a topic.
In the purification substage, duplicates were discarded ( 46) and the remaining articles (62) were screened through an evaluation of their title, abstract, and full text.This resulted in the exclusion of a further 17 articles which were inconsistent with service innovation capability at the firm level, leaving a final list of 45 articles for analysis.Lim et al. (2022) recommend that systematic reviews should include a minimum of 40 articles to produce adequate insights on a topic.

Assessing
The Assessing stage includes the evaluation and reporting of reviewed literature (Paul et al., 2021).For this literature review, content analysis was performed, using each of the elements in the TCCM framework to structure the evaluation and analysis of themes in the literature (Kraus et al., 2022).Using this framework can enhance the reliability of results (Ameen et al., 2022).Following an identification of research gaps, we devised an agenda for future research by focusing on specific elements of the TCCM framework.

Results
The results in this section are presented according to the TCCM framework (Paul & Rosado-Serrano, 2019) and illustrated in tabular form.In Table 1, journals, titles, article types, research contexts, theoretical approaches, and number of citations are listed.

Resource-Based View
The resource-based view (RBV) is a dominant theory for studying how an organization's internal competencies and capabilities determine their outcomes and performance - (Alnawas & Hemsley-Brown, 2019).The theory defines resources as tangible and intangible assets that firms own, control, or 'have access to on a semi-permanent basis' (Helfat & Peteraf, 2003, p. 999).With this theory, organizations are regarded as 'bundles of resources', which are heterogeneously distributed, and are the basis for achieving competitive advantage when they are valuable, rare, inimitable, and non-substitutable (referred to as VRIN criteria) (Eisenhardt & Martin, 2000).This is because resources that meet these criteria allow firms to develop novel value creating strategies that cannot be easily replicated by competitors and achieve an advantage through improved efficiency and performance (Hareebin, 2020b).Resources are of such interest as they can be deployed to continually develop existing capabilities, routines that transform inputs to outputs, and create new capabilities, which allow organizations to innovate and achieve superior performance (Daugherty et al., 2011;Giannopoulou et al., 2011).
Studies that utilize this theory regard SIC as an internal competence or capability that helps organizations to gain marketplace advantages (Mathew et al., 2021).

Dynamic capabilities view
The dynamic capabilities view (DCV) is an extension of the RBV which contends that the possession of resources with VRIN characteristics is not sufficient for organizations to remain competitive in complex and changing business contexts (Fischer et al., 2010;Kohler et al., 2014).Instead, the theory links sustained competitive advantage with an organization's ability to constantly adapt and reconfigure its resources and operational capabilities (Teece, 2009).While operational capabilities are concerned with the performance of a coordinated set of tasks, dynamic capabilities are regarded as higher-order capabilities that 'integrate, build, and reconfigure such competences and routines in order to achieve new and innovative forms of competitive advantage' (Plattfaut et al., 2015, p. 7).
The concept of dynamic capabilities is used in service innovation research to refer to business capabilities that can integrate, establish, or reconfigure operational capabilities and allow organizations to immediately react to changes in their environment through the introduction of innovative services (Breznik & Hisrich, 2014).It is viewed as particularly useful in the services context as innovative activities tend to be less tangible than those in manufacturing firms and more interwoven with 'capabilities embedded in the processes and routines throughout an organization' (Den Hertog et al., 2010, p. 491).Five of the studies examined as part of the literature review regarded SIC as a dynamic capability (Cheng, 2011;Hariandja et al., 2014;Plattfaut et al., 2015;Pongsathornwiwat et al., 2019b;Wu & Nguyen, 2019).

Context (C)
The research was mainly conducted in the context of tourism and hospitality (8), professional services firms (4), banking and finance (4), logistics services (3), and research and technology organizations (2) (Table 1).Five of the studies focused on small and medium-sized enterprises (SMEs), with the same number in the context of business-tobusiness (B2B) services.Up to July 2022, studies of service innovation capability took place in 18 countries, with most being undertaken in Taiwan.Table 2 presents the geographical context of articles included in the literature review.

Characteristics (C)
The characteristics of the domain, including definitions (Appendix Table 1), antecedents, dimensions, mediators and moderators, and outcomes (Table 3) covered in the literature are now presented.

Definitions
As SIC is a complex construct, scholars have defined it in various ways, using different theoretical lenses, e.g.RBV (Alnawas & Hemsley-Brown, 2019), or in the precise context of their research, e.g.logistics (Daugherty et al., 2011).As a result, there is some inconsistency between definitions, which can simply refer to an organization's ability to develop or improve its services (Blaique et al., 2022), or emphasize ideas (Yasmeen et al., 2019), the use of knowledge (Cheng, 2011), execution of service development processes (Gryszkiewicz et al., 2013), or collaboration with customers (Khaksar et al., 2017).

Dimensions
Five of the studies reviewed specified dimensions of service innovation capability.For two, they were based on the suggested dimensions of dynamic capabilities, sensing,    seizing, and transforming (Hariandja et al., 2014;Plattfaut et al., 2015).These studies understand SIC as a dynamic capability that incorporates an organization's ability to learn from 'customers, collaborators, and competitors' (Hariandja et al., 2014, p. 144), the exploration and selection of feasible opportunities, and 'implementation of a new or modified service concept into the organization and into the market' (Plattfaut et al., 2015, p. 8).Dimensions suggested by other studies included factors such as, clientfocus, marketing-focus, technology-focus (Hogan et al., 2011), entrepreneurial orientation, service co-production, and learning orientation (Hareebin, 2020a).

Mediating and moderating variables
Five of the studies examined mediators of the relationship between SIC and another variable.They included, for example, customer participation (Ngo & O'Cass, 2013), service innovation success (Kiani et al., 2019), collaboration (Pongsathornwiwat et al., 2019a), and customer relationship management programs (Tsou & Chen, 2019).SIC was treated as a mediator in five studies.
Nine studies reported moderating variables in the relationship between SIC and another variable.These included, open business models (Cheng, 2011), knowledge exploration practices (Kiani et al., 2019), and transformational leadership (O'Cass & Sok, 2013).SIC was interpreted as moderator of the relationship between coproduction and value creation in one study (Wu et al., 2020).

Outcomes
Two primary outcomes of SIC were specified by research in the sample (see Table 3).The first, service innovation, refers to the introduction of a 'new service concept, new customer approach, new value system, new organizational design, new revenue model, or new implementation of [a] technological service delivery system' (Wu & Nguyen, 2019, p. 8).Innovative outputs of this type are achieved through the ability of organizations to deploy and utilize their resources to rapidly respond to customer's needs (Cheng, 2011;Wu & Nguyen, 2019).The second major outcome was organizational performance.An organization's ability to innovate its services is linked with improvements to financial and non-financial performance and sustainable competitive advantage (Wang & Liu, 2020).

Methodology (M)
Of the research included in this review, three studies were conceptual and 42 were empirical.Both qualitative and quantitative methods were adopted by the articles in the sample.Table 4 reports the methodologies and data analysis techniques used in the examined literature.Quantitative methods (30) were the most popular methodology, where surveys and covariance-based structural equation modeling (CB-SEM) (15) were applied.Partial least squares structural equation modeling (PLS-SEM) (Hair et al., 2016) was used in eight studies.A minority of studies utilized qualitative methods (9), including interviews, while only three studies used a mixed methods approach.Of the 31 studies that employed measures of SIC, all were reflective (Bollen & Diamantopoulos, 2017) and 29 were unidimensional (Jarvis et al., 2003).Appendix Table 2 details all reported measures.

Theory (T)
Based on the results, most of the reviewed studies investigated SIC by applying a specific theory or theories.Though only ten of the studies were not anchored with a robust theoretical framework, for some, a theoretical basis was named, but its application was not clearly justified.We encourage researchers to clearly explain and justify their rationale for applying an existing theoretical approach in future studies.
Seven studies paired multiple theories to overcome deficiencies with one of those selected.For five, this involved combining the RBV with the knowledge-based view (Fernando et al., 2019;Mathew et al., 2021), the strategy-structure-performance framework (Daugherty et al., 2011), or DCV (Den Hertog et al., 2010;Lillis et al., 2015).This appears to be the case due to limitations of the RBV, which is criticized for failing to account for how a static configuration of resources, implied by the theory, can guarantee longterm competitive advantage when organizations must adapt to their operating environment (Lillis et al., 2015).Though 14 of the included studies utilize the DCV as their basis, little progress is made on advancing this theory or specifying the dimensions of 'dynamic service innovation capability'.Most studies simply apply the theory 'in a services context' and the only dimensions advanced are the generic attributes of dynamic capabilities, sensing, seizing, and transforming, suggested by Teece (2007).Therefore, more interdisciplinary and multidisciplinary research is needed to develop and extend both this theory and others applied on this topic.

Context (C)
In terms of geographical area, SIC research was dispersed across the world, focusing on Asia, Europe, Australia, and South America.The majority of studies focused on developing countries, with most of the research being conducted in Taiwan.However, studies were not conducted in North America, Africa, or Russia.Hence, there is an opportunity for future studies to examine SIC in these regions.
Many articles regarded their region specificity as a limitation, making recommendations that similar studies be undertaken in other countries to confirm the generalizability of their results (e.g.Ngo & O'Cass, 2013;Ahmad et al., 2022b) or triangulate their findings (Daugherty et al., 2011).Thus, future studies could utilize cross-national or cross-cultural research to validate existing studies or identify differences or similarities between regions.In addition, we recommend comparative studies of dimensions, antecedents, or performance between sectors (Al-kalouti et al., 2020), public and private organizations (Blaique et al., 2022), or manufacturers and 'pure' service industries (Janssen et al., 2015).

Characteristics (C)
Despite numerous definitions of SIC in the examined articles, there is little consensus on how the term should be interpreted (see Appendix Table 1).Existing definitions are fragmented and emphasize distinct aspects of the phenomenon or conceptualize it with its antecedents (Parida et al., 2015).In response, this study consolidates key themes from these definitions and advances a comprehensive and original conceptualization of SIC as a capability, embedded in the routines or processes of an organization, with the potential to repeatedly deploy and reconfigure resources in the continuous creation or improvement of services.Future research can apply or build upon this definition.
Hulland and Houston (2020) recommend organizing frameworks to provide an integrated overview of existing research.Based on our literature review, Figure 2 illustrates such a framework which synthesizes antecedents, dimensions, mediating and moderating variables, and outcomes reported in existing firm-level service innovation capability research.Though variables advanced in the reviewed research are often empirically entangled, they were separated and organized using categories to enhance understanding.

Antecedents
Antecedents are drivers or determinants of SIC in organizations.The categories of antecedents identified in the reviewed research were Technology; Customer Involvement; Practices, Processes, and Structure; Strategic; Knowledge Management; Resources; Networking; Cultural; and Regulation.
Customer Involvement: Customer Involvement antecedents describe the development of an understanding of actual or potential customer's diverse needs and sharing this intelligence internally (Grawe et al., 2009).This allows organizations to keep pace with customer demands and anticipate new opportunities (Yasmeen et al., 2019) as they continuously learn and adapt (Wu & Nguyen, 2019).As services are often co-created with customers, this category of antecedents is regarded as a vital source of information and key to SIC (Parida et al., 2015).It includes the systematic observation and analysis of customers (Janssen et al., 2015), maintaining valuable relationships (Tang, 2015), and collaborating with service users in the development of innovations (Al-kalouti et al., 2020).
Strategic: Though linked to an understanding of customer's needs, the category of Strategic antecedents relates to how internal capabilities can be used to achieve desired outcomes (Blaique et al., 2022;Grawe et al., 2009).Strategic antecedents describe concrete short, medium, or long term plans (Hareebin, 2020b) and specifying a common vision and direction for how new services will fit into an organization's overall strategy (Giannopoulou et al., 2011).
Knowledge Management: Managing and deploying diverse and distributed knowledge is required to develop and commercialize service innovations (Hareebin, 2020a).This category of antecedents highlights the importance of communication and collaboration between employees (Al-kalouti et al., 2020) and the sharing of technical knowledge (Parida et al., 2015), knowledge about customers (Yasmeen et al., 2019), and knowledge about markets (Wu & Nguyen, 2019).This flow of information (Hsieh & Chou, 2018) can be synthesized by employees into new service ideas (Tang et al., 2015).
Networking: The category of Networking antecedents describes collaborating or coordinating activities with partners or external parties (Janssen et al., 2015).Building business networks (Hareebin, 2020a) allows organizations to access valuable resources, knowledge, or skills from other firms, governments, academia, or suppliers (Fernando et al., 2019;Giannopoulou et al., 2011) for continuously creating service innovations (Pongsathornwiwat et al., 2019a).
Technology: Technology antecedents refer to the awareness of an organization of promising technologies (Den Hertog et al., 2010), including automation, digitalization, advanced analysis, databases, and systems (Parida et al., 2015), and their application to improve employee productivity, information processing, and service processes (Hsieh & Chou, 2018) to better cater to customer's needs (Zhang & Hu, 2021).
Practices, Processes, and Structure: The Practices, Processes, and Structure category of antecedents describes the rules, procedures, instructions, and systems (Blaique et al., 2022;Hareebin, 2020a) that exist in organizations for developing new services (Gryszkiewicz et al., 2013) and delivering them to customers on a large scale in a uniform way (Den Hertog et al., 2010;Janssen et al., 2015) or customizing them to specific markets (Parida et al., 2015).As services are often intangible in nature, codification adds structure to the coordination of activities and reduces variability in the creation of value (Daugherty et al., 2011).
Regulation: Only a single study advanced a factor relating to regulation.Fernando et al. (2019) suggest that compliance with eco-innovation regulations encourages firms to innovate their services sustainably.

Dimensions
Dimensions are the characteristics or attributes of SIC.Those identified in the research were organized under the categories: Areas of Activity, Cultural, Capabilities, Technology, and Customer Involvement.
Areas of Activity: Hogan et al. (2011) dimensionalize SIC according to areas of activity.These include a client-focused innovation capability that reflects the ability of an organization to offer unique and superior benefits to competitors and solve customer problems in innovative ways; and a marketing-focused innovation capability that relates to novel and innovative promotional approaches and marketing programs (Hogan et al., 2011).
Cultural: Hareebin (2020a) propose three cultural factors as the dimensions of SIC.These are entrepreneurial orientation, which emphasizes a willingness to accept risks when innovating to compete with rivals; market orientation, describing the effective management of resources in response to environmental changes; and learning orientation, that highlights the importance of innovativeness as part of an organization's culture to improve efficacy and adjustment to new innovations (Hareebin, 2020a).
Capabilities: Plattfaut et al. (2015) and Hariandja et al. (2014) regard SIC as a dynamic capability and specify its dimensions according to the theory.The sensing dimension relates to identifying innovative service opportunities by understanding customers, competitors, and markets.Feasible opportunities are then selected and addressed through the seizing dimension.Finally, the transformation (Plattfaut et al., 2015) or transforming (Hariandja et al., 2014) capability is used to implement the new or modified service concept in the organization and market.
Technology: Dimensions of SIC relating to technology were proposed by Hareebin (2020a), who emphasized information technology adoption, and Hogan et al. (2011) who include both the adoption of technology and the ability of an organization to innovate with that technology to keep ahead of the market.
Customer Involvement: Hareebin (2020a) regards service co-production as a dimension of SIC.It describes interactive relationships during service provision that precisely address customer needs, increase satisfaction, and lead to repeat custom or recommendations (Hareebin, 2020a).

Mediating and moderating variables
Mediating.Various categories of mediators were advanced in the reviewed research that explained the relationship between SIC and its outcomes.The factors that mediated the relationship between SIC and various outcome variables were grouped under the categories Customer Involvement, Innovation Success, and Networking.
Customer Involvement: The customer involvement category of mediators describes the degree to which customers are involved in producing and delivering a service (Ngo & O'Cass, 2013).It includes the collection of customer data or contacting customers directly to identify their needs (Tsou & Chen, 2019).As firms are better able to customize their offerings to meet these needs, the category explains the relationship between SIC and other variables, such as service quality (Ngo & O'Cass, 2013).
Innovation Success: As service failures lead to the waste of resources and investment, Kiani et al. (2019) show that service innovation success mediates the relationship between SIC and business model innovation.
Networking: Pongsathornwiwat et al. (2019a) propose supply chain collaboration as a mediator between SIC and performance improvement.Their study shows that interorganizational relationships, where resources and information are shared between firms, provide insights into the needs of customers, and enhance performance.
Moderating.Variables that influenced the magnitude of the relationship between SIC and its outcomes were grouped under the categories Marketing, Relationship Management, Knowledge Management, Environmental, and Managerial.
Marketing: Consumers may not be aware of or accept services that do not have a strong brand (Alnawas & Hemsley-Brown, 2019).Tobing et al. (2017) suggests that service marketing capability is important to improving the likelihood of service success and Alnawas and Hemsley-Brown (2019) similarly illustrates that branding capability strengthens the relationship between SIC and performance.
Relationship Management: Four studies advance factors categorized under Relationship Management as strengthening the relationship between SIC and improved performance outcome variables.This category of moderators describes an open business model (Cheng, 2011) and regular interactions with stakeholders, including suppliers, customers, competitors, and research organizations (Pongsathornwiwat et al., 2019b), which may be facilitated by technology (Tsou & Chen, 2019), through which an organization understand customer needs more deeply and reduce the risk associated with innovations (Alnawas & Hemsley-Brown, 2019).
Knowledge Management: Kiani et al. (2019) show that knowledge exploration practices influence the relationship between SIC and service innovation success.Similarly, Wu and Nguyen (2019, p. 7) confirm that market orientation, the 'organization-wide generation, dissemination, and responsiveness to market knowledge, particularly pertaining to current and future customer needs' enhances an organization's SIC and improves performance.
Environmental: According to Wu and Nguyen (2019), market dynamism, or unpredictability in customer or competitor behavior, affects the relationship between SIC and organizational performance.Their results suggest that when market dynamism is high, SIC allows an organization to continuously introduce new services (Wu & Nguyen, 2019).
Managerial: O'Cass and Sok (2013) highlight the role of managers as transformational leaders.Their study demonstrates that transformational leaders enhance the quality of new ideas generated by staff and moderate the relationship between an organization's SIC and its value offering (O'Cass & Sok, 2013).
Outcomes.Outcomes are variables that are affected by SIC.Those identified in existing research were organized using the categories Innovation Success; Firm Performance; Customer Interaction; Resources and Capabilities; and Employee Competence.
Innovation Success: Factors relating the success of innovations and predicted by SIC included, service innovation (Wu & Nguyen, 2019) and radical service innovation (Cheng, 2011); improvements to the value offering (O'Cass & Sok, 2013); and customer perceived value (Tobing et al., 2017).
Customer Focus: Three studies advanced outcome variables categorized as Customer Focus.Tsou and Chen (2019) show that SIC is related to two aspects of an organization's electronic customer relationship management; Heng et al. (2020) show that there is a relationship between SIC and customer-centric strategy, an organizational strategy that focuses on services to customers; and Fready et al. (2022) report that organizational preparedness for business-consumer virtual interaction is a synergistic effect of service innovation orientation and SIC.
Employee Competence: Ahmad, Liu, Asif, et al. (2022) show that SIC predicts three factors that relate to the competence of employees.Their study demonstrates that organizations with a higher service innovation capability also have more effective and adaptive salespeople who are able to respond well to customer criticism to recover a failed service.
Resources and Capabilities: Service marketing capability, the ability of organizations to apply their resources and capabilities to address business and marketing needs, is an outcome of SIC proposed by Tobing et al. (2017).Tsou and Chen (2019) show that higher levels of SIC are related to greater investment in self-service technology as more innovative organizations are likely to invest more in technological resources that can address customer's needs.
Though studies to date have advanced knowledge on this topic, there is a need for more coordinated work to specify the dimensions and drivers of SIC.The majority of research has examined SIC as a unidimensional construct (e.g.Blaique et al., 2022;Tang et al., 2015), making it challenging to compare findings and resulting in mixed conclusions, or has separately advanced disparate drivers or antecedents of this capability, adding to confusion on the topic.This presents several opportunities for future research.Concretely specifying the dimensions of this construct, including factors such as a focus on customers, co-production, or organizational learning (Hareebin, 2020a;Hogan et al., 2011) has the potential to advance understanding of SIC.Future studies could also integrate proposed drivers, analyze how they affect each other, and determine which are most influential.Exploring the impact of other moderating variables, such as the role of culture, supportive climate for innovation, or resistance to change (Ahmad, Liu, Akhtar, et al., 2022;Fready et al., 2022), would also constitute a significant contribution.

Methodology (M)
In the reviewed literature, most of the studies applied quantitative methods.The majority employed a survey methodology with statistical analyses.This is unusual, especially in an emerging field of research, where it might be expected that qualitative studies would precede quantitative ones.Nevertheless, qualitative studies with focus groups or interviews were not popular, despite some of the reviewed articles recognizing the need for research of this nature (e.g.Yasmeen et al., 2019).Only three of the studies utilized mixed methods, blending quantitative and qualitative methods.We encourage future studies to use qualitative or mixed methods approaches to identify managerial practices, motivations, and challenges relating to SIC management in organizations.
As none of the examined studies utilized a longitudinal approach, future work could use panel data analysis or other approaches to study changes in SIC over time, validate causal relationships between variables, or investigate long-term trends.Further studies could also develop and validate formative, multidimensional measures of SIC.No measure has been proposed in the examined literature that meets these criteria, despite strong arguments regarding the multidimensional nature of the SIC construct (Hogan et al., 2011) and the practical relevance of formative indicators to managers (Cadogan et al., 2008).Additionally, there is an opportunity to mirror research on the innovation capability of manufacturers (Mendoza-Silva, 2021) and design a measure of SIC maturity that can describe an organization's present performance and provide practitioners with guidelines for its improvement.

Contributions and conclusion
In contrast to a rich body of literature on innovation capability (Mendoza-Silva, 2021), often reflecting the conditions of manufacturers or product innovation, research on SIC is still in its early stages.To the best of our knowledge, the present study is the first systematic literature review to provide a comprehensive examination of this topic.This research was rigorously and transparently conducted using the SPAR-4-SLR protocol (Paul et al., 2021) through which 45, of the 108 academic studies published in peerreviewed journals, fulfilled the selection criteria.Results were analyzed in accordance with Paul and Rosado-Serrano's (2019) TCCM framework, providing a state-of-the-art overview of the domain, and identifying opportunities for research to better understand the nature of this phenomenon.The key contributions of this study are summarized in Table 6.
Key theoretical implications of the research are our novel and original definition of SIC and the study's integration of factors in SIC's nomological network that have been identified to date.The definition advanced in this research is clear and unambiguous, consolidating and integrating 31 conceptualizations found in existing research.Applying or adapting this new definition and comprehensive understanding has the potential to advance the topic through its value in maintaining a consistent understanding of SIC between studies.Our organizing framework (Figure 2) can also guide researchers with future work.We suggest that the factors included in this framework, and others, should be explored through more coordinated research efforts that concretely specify the dimensions of SIC, explore its drivers and their interaction, and include other relevant moderating variables.Such an approach would provide greater clarity to the construct for both researchers and practitioners.
The findings, too, reveal several shortcomings in the literature.Presently, there is a lack of cross-national and cross-cultural studies of SIC.We recommend conducting such research as it can be used to confirm or reject the generalizability of existing studies and provide interesting insights into national or regional differences.There is also a need for comparative studies between organizations of different types, additional qualitative or mixed methods studies, longitudinal research, multidimensional and formative measures, and for a stronger justification and contribution to theory by studies.Finally, there is an opportunity for research, analogous to that focusing on the innovation capability of manufactures or industrial organizations, which can be used to assess and improve SIC maturity.
To a lesser extent, this research also has some implications for managers.It compiles and specifies antecedents of SIC, directing the focus of organizations to areas where they might improve this key capability, and its outcomes.A preview is also provided to non-academic readers of what they can expect from future advancements in SIC research.
It is important to acknowledge the limitations of this research.The review included 45 studies published in peer-reviewed English-language journals, meaning included papers may not be fully representative of peer-reviewed journals as those not in English or indexed in the two selected databases were not included.While acknowledging this is a limitation of this research, it also facilitates repetition of the study.Additionally, the review is a single-author review, which meant that a cross-checking or analysis of results did not occur.To reduce the impact of this limitation, organizing frameworks were adopted and utilized to identify variables related to SIC and report all results transparently.In spite of these limitations, the contribution of this work lies in the systematic procedure employed and thorough analysis which offers new insights with the aim of advancing knowledge in the field of SIC.It is our hope that this systematic review will encourage scholars to contribute further to this topic.

Disclosure statement
No potential conflict of interest was reported by the author(s).

Figure 2 .
Figure 2.An organizing framework for firm-level service innovation capability.

Table 1 .
List of articles in the literature review.

Table 2 .
Geographic focus of the literature.

Table 4 .
Methodology-based clustering of the literature.

Table 5 .
Propositions for impactful future research.area Propositions for impactful future research based on identified research gaps Theory Stronger justification for theories applied in SIC research More multidisciplinary or interdisciplinary research to develop and extend theoretical approaches applicable to this topic Context Research in heretofore overlooked regions, including North America, Africa, or Russia Cross-national or cross-cultural research to confirm the generalizability of results or explore differences and similarities between regions Comparative studies of dimensions, antecedents, or performance between sectors, public and private organizations, and manufacturers and 'pure' service industries Characteristics Application or adaptation of the comprehensive and novel definition of SIC proposed in this research Identify dimensions of SIC through coordinated research Clearly specify drivers of SIC, analyze their interaction, and determine which is most influential Explore the impact of other moderating variables, such as the role of culture, a supportive innovation climate, and resistance to change Methodology Qualitative or mixed method approaches to identify managerial practices, motivations, and challenges relating to SIC management Longitudinal research; exploring changes in SIC over time, validate causal relationships between variables, or investigate long-term trends Develop and validate multidimensional, formative measures of SIC Design a SIC maturity model to provide descriptive assessments and prescriptive guidance to managers

Table 6 .
Table of contributions.Although there are several systematic reviews of innovation capability literature in the context of manufacturing organizations, this study is the first of its kind to take stock of existing knowledge on service innovation capability.It harmonizes fragmented research and provides scholars with a strong foundation for advancing the field.Managers can gain practical tips for enhancing their organization's service innovation capability and focus their efforts on categories of antecedents.Based on identified gaps in SIC research, this study proposes a research agenda with 13 clear propositions for impactful future research.The study offers a preview of what they can expect from future SIC research.Assembles, structures, and integrates findings from disparate studies using an organizing framework to illustrate the relationships between key factors (antecedents, dimensions, mediators and moderators, and outcomes) in SIC's nomological network and guide future researchers.Reconciles existing definitions of service innovation capability by presenting a novel and original understanding based on common themes.