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The Shift to service economy is ongoing globally by transforming the social structure. This affects the research and development (R&D) organization as well. Manufacturing companies are shifting to service business, therefore the R&D in manufacturing companies needs a transformation to respond the social change. However, macro level surveys on service innovation do not capture the reality of service R&D activities yet. That is because most of companies in the service sector do not have R&D, so that they do not recognize R&D activities in service innovation. It would be important to study service innovation in a manufacturing company transforming to service business which has a R&D organization, and to understand R&D activities which contribute to service innovation. Research on service innovation is rooted mainly in product development based on technology trajectory. The modern service marketing introduces service-dominant logic (S-D logic) perspective without separating services and goods, which is based on value co-creation between service providers and customers. In this paper, a new service research model focusing on value co-creation is proposed based on the S-D logic view. A set of hypotheses on service research model for value co-creation is developed and tested using data on research activities of service innovation projects. We find that the technologies developed in the research, and the mutual organizational understanding of service and research contribute to the value co-creation interaction with customers and researchers. The value co-creation interaction is facilitated by service innovative orientation and technologies. It also advances the discovery of research themes. As the result, a new type of service oriented researchers is emerged, which is not only focusing on creating new technologies, nor adapting technologies to the customer's context, but discovering research themes by expanding the research scope to creat- - e the customer's service system. We discuss managerial implications of these findings and conclude with the study's limitations and directions for the future research.