Why have services grown into the dominant sector of developed economies? Our analysis of secondary data shows that business services make the strongest contribution to the rise of the service sector. We use contributions from three related theories economic theories of the firm to explain the force business services have in shaping firms, industries and economies. Business service providers relieve their clients from the costs of asset ownership (Property Rights Theory), unlock management capacity (Resource-Based View) and support their clients in navigating towards their most valuable business opportunities (Entrepreneurial Theory of the Firm). We show how these theories help to build on the non-ownership value provided by business services that result from sound division of labor between organizations. We highlight three areas that call for research and provide opportunities for service science: (1) Systematic design of business-models for fostering service performance, (2) the transformation of high-tech-products into service-hubs, and (3) service-driven innovation and the transformation of R&D into a service sector.