Services have emerged as major economic activities in Taiwan in recent years, since more than 70% of GDP in Taiwan is generated by service sectors. Nevertheless, knowledge of service innovation remained under-explored. To address this research gap, this study proposed the concept of “Service Innovation Readiness” based on expert interviews of five service industries (Department Stores and Retail, Financial, Biotechnology and Medicine, Tourism, and Information Services) and a review of existing literature. Given this, we propose a multi-dimensional construct of Service Innovation Readiness (SIR) consisting of five factors: Strategic Investment, Risk Tolerance, Innovative Champion, IT Experience, and Inter-Organizational Collaboration. To validate the framework of SIR, a survey was conducted in the five service sectors and the final sample consisted of 312 valid cases. The results grant support to the framework, showing that SIR is a multi-dimensional construct. The positive relationship between SIR and service performance provides further evidence to support the predictive validity of the construct measurement. Conclusion and implications are included.