More than two thirds of gross domestic product in modern economies (in Austria it is 69%) are created through the service sector - an ever increasing trend. Knowledge-intensive services are critical innovation drivers for the service sector. The need for innovative services will increase even more distinctively to guarantee sustainable economic growth in the future. As core products become more and more interchangeable also industrial based businesses see the need for innovative services increasing in order to remain competitive. Knowledge-intensive services are characterized by intangibility, individuality and a high degree of interaction as well as a high uncertainty in relation to the service output. Know-how is central not only as a resource for providing services but also as service outcome. A key result of this work is that knowledge intensive service innovation can be systematically planned, developed and designed. To this end "Service Engineering" and "Service Design" offer two different methodologies for developing new services. They will be discussed within the context of knowledge intensive services. Based on these tools a "Service Innovation Process" is created, which is an iterative model for the systematic design and development of service innovations from a customer's perspective. In addition, recommendations for the initiation and steering of organizational change and learning processes will be presented. Finally, the implementation of theoretical insights and models complete this work and lead to additional findings in the context of analyzing a specific knowledge intensive service business.