Unit 1 service economy nguyen manh tuan

Microsoft PowerPoint Bài giảng Unit 1 The Service Economy Kinh tế dịch vụ Nguyen Manh Tuan Roles of Service in an Economy Economy Evolution More on Service sector Experience economy Service definitions Emergence of Service Sience

Unit 1

The Service Economy

Nguyen Manh Tuan

6 Emergence of Service Science

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 Describe the central role of services in an

economy

 Identify and differentiate the 5 stages of

economic activity

 Identify the features of preindustrial, industrial,

and postindustrial societies

 Describe the definitions of service

Learning Objectives

1 Roles of Services in an Economy

 Services are NOT peripheral activities but

rather integral parts of economy

 Service: crucial force for today’s change toward

 Integration of downstream services

 Exploiting value added services

 Service Definitions

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Fitzsimmons & Fitzsimmons 2006

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5/18/2020 nguyen manh tuan – internal use 1-51.Roles of Services in an Economy (cont’)

Fitzsimmons et al 2014

Teboul 2006

Teboul 20061.Roles of Services in an Economy (cont’)

1.Roles of Services in an Economy (cont’)

Bryson & Daniels 2008

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1.Roles of Services in an Economy (cont’)

The economies of the world are becoming one large service

system

Spohrer & Maglio 2008macro level

1 Roles of Services in an Economy (cont’)

Spohrer & Maglio 2008

micro level

2 Economic Evolution

 The three-sector hypothesis is an

economic hypothesis which divides

economies into three sectors of activity:

extraction of raw materials (primary),

manufacturing (secondary) and services

(tertiary)

 The increase in quality of life , social security ,

blossoming of education and culture , higher level of qualifications, humanization of work ,

and avoidance of unemployment

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2 Economic Evolution (cont’)

Spohrer & Maglio 2008

Kwan 2011

2 Economic Evolution (cont’)

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For the first time in 2006, more people worked in the service

sector worldwide than in either the manufacturing or agricultural

sectors (ILO 2007)

Fitzsimmons & Fitzsimmons 2006

2 Economic Evolution (cont’)

Muscle power and tradition

An extended household, low productivity, little technology, high underemployment

Fitzsimmons & Fitzsimmons 2006

2 Economic Evolution (cont’)

Individual as social unit

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Fitzsimmons & Fitzsimmons 2006

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2 Economic Evolution (cont’)

Life as a game against persons

Success measured by quality of life with services (health, education, recreation ), social rights, political claims, environmental protection

Central role is professional persons with information rather than energy is key resource

Community rather than individual as social unit

Interdependent & global features of development

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2 Economic Evolution (cont’)

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http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

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2 Economic Evolution (cont’)

 A ‘Manuservice’ economy?

(Service Worlds, Bryson & Daniels 2008)

 the ‘ Services Duality ’ and the rise of the

 notion of a separate ‘service sector’ is an arbitrary

outcome of classification procedures designed for other purposes - a ‘chaotic conception’

 manufacturing is also service driven and services are

also manufacturing driven

 2 sectors of the economy become one discourse of

production and consumption and of consumption and production

3 More on the service sector

 Service industries as the source of

economic leadership

Blue-collar workers  white-collar ones

 25% US total employment in high skill services (professional, business, healthcare, educational, social assistance) (Bureau of Labor Statistics, 2009)

 Recession-resistant nature of services

 Services not inventoried

 Service demand as usual in recession

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2013 nmt 1-19

3 More on the service sector (cont’)

Fitzsimmons et al 2006

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3 More on the service sector (cont’)

 More career opportunities for everyone.

 Freedom to choose from a variety of jobs, tasks, and assignments.

 More flexibility in how and where work is performed, i.e., telecommuting.

 More control over your own time.

 Greater opportunity to express yourself through your work.

 Ability to shape and reshape your life's work in accordance with your values and interests.

 Increased opportunity to develop other skills by working in various industries and environments.

3 More on the service sector (cont’)

 Services tend to create good entry-level jobs (average ability in superior environment ) and then provide growth paths that lead to high talent or jobs associated with high technology performance

 Linking the growth of information and communication technologies (ICT) in an economy to the growth of service sector and the growth of GPD per capita

 Technology, business, and work innovations evolve

co-Spohrer & Maglio 2008

3 More on the service sector (cont’)

 Innovation

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4 Experience Economy

 Gilmore and Pine’s theory was that in

economies of mass affluence, people are more

interested in paying for an experience than

paying to own things

 The memory of the experience becomes the product

 An stage of economic evolution in which added value is created by engaging and connecting with the customer in a personal and memorable way

 Pine and Gilmore say that the evolution of an

economy is analogous to the stages of a

birthday cake.

Gilmore & Pine 1999

4 Experience Economy (cont’)

1 Agrarian Economy

 Parents made cakes from scratch, mixing

inexpensive ingredients from their farm.

2 Industrial Economy

 Parents paid a few dollars to buy premixed

ingredients in a box thus showcasing the

goods-based industrial revolution.

3 Service Economy

 Busy parents paid significantly more , ten to

fifteen times the ingredients’ price, to order a

cake from a bakery or grocery store.

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Gilmore & Pine 1999

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4 Experience Economy (cont’)

4 Experience Economy

 Parents outsourced the entire birthday event at a local venue that creates a memorable experience for kids They spend hundreds of dollars for the experience

and the venue includes the cake for free.

Social/ Social Experience Economy ???

 The birthday kid crowdsources with friends where

their experience should be held Their friends have

more influence over their decisions than their family

4 Experience Economy (cont’)

4 Experience Economy

Social/ Social Experience Economy ???

 Parents are not left out of the Social Economy

Parents now live stream the entire experience to

family members that cannot attend They take

pictures and videos that they immediately upload to

their social networks

 People carry their friends in their pockets and are always sharing their experiences with them They text, chat, share digital “face time,” and showcase visual images whether through video or pictures

 The sharing and connecting with others about the experience becomes the product

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Gilmore & Pine 1999

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4 Experience Economy (cont’)

Gilmore & Pine 1999

4 Experience Economy (cont’)

Typologies of Services in 21st century

5 Service Definitions

Defining services is not easy:

problems (Gronroos 1990);

 all economic activity whose output is not physical product or

construction (Baruch et al 1987);

al 1978);

 a time-perishable, intangible experience performed for a customer

acting in the role of co-producer (Fitzsimmons & Fitzsimmons 2005);

by another (Hill 1977)

 application of competencies for the benefit of another entity

(Vargo & Lusch 2004)

Spohrer & Maglio 2008

5 Service Definitions (cont’)

Defining services is not easy:

 pay for performance: what the provider does for

the client is essential, as opposed to exchange

of an artifact or a good being essential

co-produced by client and provider

 at least 3 types of performance to providers:

 high technology performance (ordering dinner from a website), and

(service personnel with average abilities, a good cookbook, and a well-equipped kitchen)

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Spohrer & Maglio 2008

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5 Service Definitions (cont’)

Defining services is not easy:

 pay for performance in which value is

co-produced by client and provider:

 Firms can invest in talent, invest in technology , or

provide a superior environment for performance:

of services for a client with the greatest levels of unique customization.

 Technology allows for the greatest efficiencies to be achieved for highly standardized or well-scoped alternative

configurations

part of the provider in finding employees who can perform well for clients with some degree of customization

Spohrer & Maglio 2008

5 Service Definitions (cont’)

Defining services is not easy:

 Considering a teacher telling a student to read a

book and work a problem set (exercises) or a

doctor instructing a patient to eat certain foods

and exercise more

 Providers perform certain activities, but clients must also perform activities that transform their own states

or else the benefit/value of the service will not be fully attained

 In business services, if client does not install the

new IT systems and train the necessary people

in the reengineered process, client will not

receive the benefit of the service

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Spohrer & Maglio 2008

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5 Service Definitions (cont’)

Defining services is not easy:

 The provider must negotiate to monitor and assess that

the client is performing adequately on the client’s

responsibilities, and, of course

 The client needs to determine that the provider is likewise applying satisfactory effort and quality controls in the

performance of the provider’s tasks

 A time-perishable, intangible experience performed for a

client who is acting as a co-producer to transform a state

of the client

 The client plays a key role in co-production activities (the

client has responsibilities) and in the co-creation of value

(transformed state of the client)

Spohrer & Maglio 2008

6 Emergence of Service Science (cont’)

 Academic interest in services has been growing

slowly and steadily, with more and more

disciplines rethinking their curricula and research

agendas in light of the growth of services

 Nevertheless, most academics and government

policy makers are still operating in a

manufacturing paradigm rather than in a service

paradigm

 The content of course shifts over the last 100

years - toward more balance among human ,

Spohrer & Maglio 20085/18/2020

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6 Emergence of Service Science (cont’)

teaching of service, identified as service science,

management, and engineering (SSME), or

Service Science for short

to take into account factors important to the user

experience of services.

6 Emergence of Service Science (cont’)

 Vargo & Lusch (2004): a service-dominant logic (SDL) in

marketing to replace the goods-dominant logic

 “Service" as the application of competences for the benefit

of another entity

 “Service" (singular), which is a process >> “Services“

(plural) which implies "intangible goods"

 “Operant resources" (value in use, verbs) >> “Operand

resources" (value in property, nouns)

 Marketing with (relational) >> marketing to (transactional)

 Value is always co-created

(blurring the goods-service/producer-consumer divide)

 All economies are service economies, and all businesses are service businesses

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6 Emergence of Service Science (cont’)

Vargo, Lusch & Akaka 2010

THE END

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