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The Information Society and the Service Economy

The Information Society and the Service Economy. Ian Miles PREST and CRIC University of Manchester. The Service Economy. What are services? What’s special about them? The Rise of Services Services and Information Technology Services Innovation and IT

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The Information Society and the Service Economy

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  1. The Information Society and the Service Economy Ian Miles PREST and CRIC University of Manchester

  2. 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

  3. 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

  4. ISIC 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 Goods Hotels 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 Service Sectors

  5. 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

  6. Services Characteristics Diversity • OPERATIONS ON PHYSICAL, HUMAN AND SYMBOLIC PROCESSES TO CHANGE STATES • VARIETY OF TYPES OF, AND PARTIES TO, INTERACTIONS Features • LESS ABOUT MATERIAL PRODUCTION OF TANGIBLE ARTEFACT • MORE PRODUCTION OF “SERVICE”: SUPPLIER - CLIENT INTERACTION

  7. The Rise of Services Three Sector and Continuous Models Service Economy Theory (Services as Backward) Post-Industrial Theory (Services as Advanced) debate Deindustrialisation Theory (Services as Parasitic) Demand change Centrality of Knowledge New sectors IT revolution Productivity Differences Price Changes Multi Sector and Discontinuous Models Information Society Theory (Some Services as Vanguard) Externalisation & outsourcing Unproductive Services

  8. Services across the Economy Service sectors grow as a share of the whole economy; Service occupations grow as a share of most sectors Sectors Sectors Occupations Occupations

  9. OECD Service Employment

  10. “Producer Service” Sector Growth 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)

  11. 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...

  12. 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

  13. Theories of Service Innovation • Contingencies differ • Richard Barras - reverse product cycle • servuction • Soete & Miozzo

  14. Service Firms in an Innovation Taxonomy Pavitt Science-based firms; Scale-intensive firms; Specialised equipment producers; Supplier-dominated firms Soete & Miozzo Supplier dominated sectors (a) Production-intensive scale-intensive sectors (b) network sectors Specialised technology suppliers and science-based sectors

  15. “Peculiarities” of Services Influences on Services Innovation? Shape strategies of Services Innovation? Convergence in Manufacturing and 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

  16. Manufacturing Sectors Service Sectors "Pure Manufacturing" "Pure Services"

  17. 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

  18. 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).

  19. 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

  20. KIBS’ roles: • Translation • Transfer • Transposition • Transformation Of Knowledge Resources Fusions of Generic, Sectoral and Local Knowledge to solve client problems

  21. Standardised and Specialised Services in the German Survey

  22. 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

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