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The Information Society - MSc Module
Federal School of Business and Management PREST
The Information Society and the Service Economy
Ian Miles
PREST and CRIC
University of Manchester
The Information Society - MSc Module
Federal School of Business and Management PREST
The Service Economy
• What are services?
• What’s special about them?
• The Rise of Services
• Services and Information Technology
• Services Innovation and IT
• Knowledge Intensive Business Services in the Information Society
The Information Society - MSc Module
Federal School of Business and Management PREST
Insights• Service Economy is not just service sectors
(Giarini): service functions pervasive and many grow in significance
• Gershuny (New Service Economy) focus on service functions and informal economy - goods versus services.
Service laggards Role of IT Self-services: role of service clients Business Services
The Information Society - MSc Module
Federal School of Business and Management PREST
Service SectorsISIC
Trade, restaurants and hotels
Transport, storage and communications
Finance, insurance, real estate and business services
Community, social and personal services
NACE Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and Household GoodsHotels and Restaurants Transport, Storage Financial Intermediation Real estate, Renting and Business Activities Public Administration and Defence; Compulsory Social Security Education Health and Social Work Other Community, Social and Personal Service Activities
The Information Society - MSc Module
Federal School of Business and Management PREST
Hill, Riddle, and beyond:Primary sector: extracting raw materials from the environment.Secondary sector: transforming these raw materials into material artefacts (goods, buildings, etc).Tertiary sector: effecting changes in states of:
environments - waste management, pollution clean-up, park-keeping;
artefacts produced by the secondary sector - repair and maintenance, goods transport, building services, wholesale and retail trade;
people - health and education services, hospitality and consumer services such as hairdressing, public transport;
symbols - entertainment; communication; consultancy; professional services; finance
The Information Society - MSc Module
Federal School of Business and Management PREST
Services Characteristics Features
•LESS ABOUT MATERIAL PRODUCTION OF TANGIBLE ARTEFACT•MORE PRODUCTION OF “SERVICE”: SUPPLIER - CLIENT INTERACTION
Diversity
•OPERATIONS ON PHYSICAL, HUMAN
AND SYMBOLIC PROCESSES TO
CHANGE STATES•VARIETY OF
TYPES OF, AND PARTIES TO,
INTERACTIONS
The Information Society - MSc Module
Federal School of Business and Management PREST
The Rise of ServicesThree Sector and Continuous Models
Multi Sector and Discontinuous Models
Post-Industrial Theory(Services as Advanced)
Service Economy Theory(Services as Backward)
Deindustrialisation Theory(Services as Parasitic)
Information Society Theory(Some Services as Vanguard)
Demandchange
Centrality ofKnowledge
New sectors
IT revolution
debate
Productivity Differences
Price Changes
Unproductive Services
Externalisation & outsourcing
The Information Society - MSc Module
Federal School of Business and Management PREST
Services across the Economy
Sectors Sectors
Occ
upat
ions
Occ
upat
ions
Service sectors grow as a share of the whole economy; Service occupations grow as a share of most sectors
The Information Society - MSc Module
Federal School of Business and Management PREST
OECD Service EmploymentProducer ServicesDistributive ServicesPersonal ServicesSocial Services
1960 3 19 8 121973 6 20 8 201987 10 21 8 24
0
5
10
15
20
25
1960 1973 1987
Producer Services
Distributive Services
Personal Services
Social Services
The Information Society - MSc Module
Federal School of Business and Management PREST
“Producer Service” Sector Growth
Fra
nce
Germ
any
Japan
Neth
erlands
Sw
eden
UK
US
AV
ER
AG
E
1960
19870
2
4
6
8
10
12
14P
erc
en
tag
e S
hare
of
Em
plo
ym
en
t
source: T Elfring, "An International Comparison of Service Sector Employment Growth" UNECE Discussion Papers, vol. 2 (1992) no 1 Personal and Collective Services: an International Perspective (UN Economic Commission for Europe)
The Information Society - MSc Module
Federal School of Business and Management PREST
Services and IT
• Services are major investors in IT equipment - c 80% - major users of IT labour (c 50% of software staff)
• This is uneven - financial services very IT intensive, consumer services not.
• IT as “industrial revolution” in services.• New IT services - software, computer
services, telematics services, new media...
The Information Society - MSc Module
Federal School of Business and Management PREST
Services as Innovative Laggards
• Discounted in Innovation Analysis
• Passive latecomers
• IT use forces rethink
• R&D and innovation surveys: services as active innovators, as agents of innovation across economy
• Attempts to explain, classify
The Information Society - MSc Module
Federal School of Business and Management PREST
The Information Society - MSc Module
Federal School of Business and Management PREST
Theories of Service Innovation
• Contingencies differ
• Richard Barras - reverse product cycle
• servuction
• Soete & Miozzo
The Information Society - MSc Module
Federal School of Business and Management PREST
Service Firms in an Innovation Taxonomy
Science-based firms; Scale-intensive firms;
Specialised equipment producers;
Supplier-dominated firms
Supplier dominated sectors
(a) Production-intensive scale-intensive sectors (b) network sectors
Specialised technology suppliers and science-based sectors
Pavitt
Soete & Miozzo
The Information Society - MSc Module
Federal School of Business and Management PREST
“Peculiarities” of Services• SERVICE PRODUCTION
Technology and Plant; Labour; Organisation of Labour Process; Features of Production; Organisation of Industry
• SERVICE PRODUCT Nature of Product; Features of Product; Intellectual Property
• SERVICE CONSUMPTION Delivery of Product; Role of Consumer; Organisation of Consumption
• SERVICE MARKETS Organisation of Markets; Regulation; Marketing
Influences on Services
Innovation?
Shape strategies of
Services Innovation?
Convergence in Manufacturing and Services?
The Information Society - MSc Module
Federal School of Business and Management PREST
Manufacturing Sectors Service Sectors
Services Services
The Information Society - MSc Module
Federal School of Business and Management PREST
Perspectiveson technology transfer (t/t)
Policiesfor technology transfer
Five generations The growth of producer services1 Passive, linear models - t/thappens automatically
No intermediaries required
2 Interactive model - t/t involvesdialogues and exchange betweenplayers
'Consenting adults' - assumption is still that relationships form andcommunication happens without external mediation
3 Expert consulting to help transferparticular technologies
Policy interventions explicitly recognise the need for help with this process ,but main source is seen as 'technical expertise plus a little bit of front endpush…'. Example of MAPCON - here a consultant not only bringstechnological knowledge to bear but also helps at the front end with userawareness, exploration etc.
4 Expert and process consulting Policy emphasis shifts to recognise the need for help with the process oftechnology transfer - helping users articulate and recognise their problems andneeds, helping them make connections to resources, helping them plan andimplement, etc. Examples here include the current Business Links programmewith their Innovation and Technology Counsellors.
5 Learning facilitation Recognition that a key role is not only to help with the process but to enablefirms to learn to do these things by themselves. Emphasis shifts tomechanisms for facilitating learning within organisations, and usesmechanisms including process consultants and counsellors, learning networks,Teaching Companies and other options.Timescales and nature of interventions extended, based more around long-term learning and development. Producer services evolve to provide suchprocess consulting/learning facilitation.
Rush and Bessant
The Information Society - MSc Module
Federal School of Business and Management PREST
Services and Information Society• Intangibles• Varieties of Knowledge• New Technology Based services• Rise of KIBS• Beyond KIBS? KICS??• Modes of Governance• Services Trade• Roles of IT
The Information Society - MSc Module
Federal School of Business and Management PREST
Services as Users, as Sources, and as AGENTS of Innovation...Knowledge-Intensive Business Services (KIBS)
• Rely heavily upon professional knowledge. Employment structures heavily weighted towards scientists, engineers, experts of all types. Tend to be leading users of Information Technology to support their activities. • Either supply products which are themselves primarily
information and knowledge resources; Or use their knowledge to produce intermediate inputs to their clients' knowledge generating and information processing activities.• Have as their main clients other businesses (including public
services and the self-employed).
The Information Society - MSc Module
Federal School of Business and Management PREST
KIBS include: Accounting and bookkeeping Management consultancy Specific building services (e.g. architecture, surveying, construction engineering, etc.)
Facility management services Technical engineering services Research and development services; R&D consultancy services Design (not only concerning new technologies) Environmental services (e.g. env. law, elementary waste disposal services, remediation, env. monitoring, scientific / laboratory services, etc.)
Computer and information-technology-related services (inc. software) Legal services Marketing & advertising Exploitation and trade in real estate Training Specific financial services (e.g. securities and stock-market-related activities) Temporary labour recruitment services Press and news agencies
The Information Society - MSc Module
Federal School of Business and Management PREST
KIBS’ roles:
• Translation
• Transfer
• Transposition
• Transformation
Of Knowledge Resources
Fusions of Generic, Sectoral and Local Knowledge to solve client problems
The Information Society - MSc Module
Federal School of Business and Management PREST
Standardised and Specialised Services in the German Survey
Standardised
Intermediate
Specialised
Tra
nsp. &
Com
m.
Banki
ng / In
s.
Tra
de
Oth
er
Bus. S
’s.
Oth
er
Fin
. S
’s.
Soft
ware
Sci.
& T
ech. S
’s.
0
20
40
60
80
The Information Society - MSc Module
Federal School of Business and Management PREST
Crucial Element of IS - Information Society and Innovation Systems
• Intermediaries between “Ultimate” suppliers and users
• Fusing various types of knowledge resource
• Coproducing knowledge and sometimes innovations with clients
• “New knowledge infrastructure - problems of public goods and quality control