This study provides a conceptual framework with respect to service innovation, especially from a service-dominant logic (S-D logic) perspective. Even though innovation has been discussed as one of the most critical elements in enhancing the competitiveness of service industry, it was not clear how service innovation should be different from diverse types of existing innovation. The S-D logic provides a novel and valuable theoretical perspective that unifies the conventional literature on innovation. According to this new logic, four types of service innovation are presented based on two dimensions: the degree of co-creation and the degree of networked collaboration. We argue that service innovation can arise by the activity of value co-creation between firm and customer on the first dimension. On the second dimension, the firm needs to enhance their own capabilities for service innovation by applying the resources of all actors including suppliers and customers. Our framework indicates that it is critical for productive service innovation to make customers participate in value creation process and to integrate the dispersed resources held by participants. Examples are discussed with respect to different types of services innovation.