A service is defined in the Oslo manual in the manner that "a key element of services is that the distinction between products and processes is often blurred, with production and consumption occurring simultaneously. Development of processes can be more informal for services than for goods, with an initial phase consisting of search, idea gathering and commercial evaluation, followed by implementation."
The terms service industry(ies) or service sector(s) are generally used to refer to economic activities covered by Sections G to K and M to O of the OECD's classification system NACE Rev. 1, and the units that carry out those activities.
The Oslo manual defines innovation in services as "Innovation activity in services tends to be a continuous process, consisting of a series of incremental changes in products and processes. This may occasionally complicate the identification of innovations in services in terms of single events, i.e. as the implementation of a significant change in products, processes or other methods."
In DG Enterprise and Industry the term service innovation refers mainly to innovation in the service sector provided by service entrepreneurs or service companies. It may refer also to innovation in service activities in all sectors including manufacturing in specific cases where it will then be noted. Measuring service innovation usually refers to the measuring of innovation in the service sector. The NACE classification of the service sector is used for this purpose (see above).