The Service Productivity and Quality Challenge: 5 (International Studies in the Service Economy, 5) - Hardcover

Hardcover

ISBN 10: 0792334477 ISBN 13: 9780792334477

Publisher: Kluwer Academic Publishers, 1995

Synopsis

3 While all of these explanations seem to have merit, there is one dominant reason why the percentage of GDP and employment dedicated to services has continued to increase: low productivity. According to Baumol's cost disease hypothesis (Baumol, Blackman, and Wolff 1991), the growth in services is actually an illusion. The fact is that service-sector productivity is improving slower than that of manufacturing and thus, it seems as if we are consuming more services in nominal terms. However, in real terms, we are consuming slightly less services. That is, the increase in the service sector is caused by low productivity relative to manufacturing. The implication of Baumol's cost disease is the following. Assuming historical productivity increases for manufacturing, agriCUlture, education and health care, Baumol (1992) shows that the U. S. can triple its output in all sectors within 50 years. However, due to the higher productivity level for manufacturing and agriculture, it will take substantially more employment in services to achieve this increase in output. To put this argument in perspective, simply roll back the clock 100 years or so and replace the words manufacturing with agriculture, and services with manufacturing. The phenomenal growth in agricultural productivity versus manufacturing caused the employment levels in agriculture in the U. S. to decrease rapidly while producing a truly unbelievable amount of food. It is the low productivity of services that is the real culprit in its growth of GDP and employment share.

About this title

Synopsis

The recent global recession has revealed the vital importance of service-sector productivity in all developed economies. The challenge for scholars and professionals in productivity management (economics and management science) in the coming decade is clearly to improve the productivity of the services sector. Section I addresses the economy-wide problems of measuring service productivity and its impact on economic performance. The growing volume and recognition of trade and international competition in services is the subject of Section II. The first two sections together outline the broad parameters facing the economy and individual managers as they struggle to improve service productivity in an increasingly competitive international market. The specific steps to be taken are addressed in Section III. Section IV presents an operations management perspective on the productivity problem. Section V presents the problems and opportunities that exist in productivity improvement in market services (that is, those industries where some degree of competition and market pricing exists). Finally, non-market services, a vital part of all developed economies, are discussed in Section VI.

This text aims to present the state-of-the-art thinking on the service productivity challenge from a variety of disciplines.

Edition details

• Publisher: Kluwer Academic Publishers
• Publication date: 1995
• Language: English
• ISBN 10: 0792334477
• ISBN 13: 9780792334477
• Binding: Hardcover
• Number of pages: 515
• Editor: Harker P.T.