What Is a Service Economy?
Service economy is the economic structure, growth mode and social form formed by the basic production factors of human capital. In the service economy era, human capital has become a basic factor, the importance of land and machinery has greatly decreased, and human capital has become the main source of economic growth. Therefore, the growth of the service economy mainly depends on the number of people and the level of education. The United States is a country with a large population and a high level of education. Naturally, it has become a large country in the service economy era, and its development level is far higher than other countries in the world.
Service economy
- Service economy refers to the output value of service economy
- Beginning in the 1970s, the world oil crisis turned the world economy into a service economy. Professor Ji Zhu systematically expounded the service economy in his Introduction to the World Economy. There is no doubt that a service economy based on human capital does not consume resources and environment, human capital is unlimited, and a service economy is harmonious and sustainable. It turns out that the service industry is more efficient, and all
- Specifically, the scope of the service economy includes social services that function primarily as enterprises: logistics, finance, postal services, telecommunications, transportation, tourism, sports, commerce, catering,
Overview of countries serving the economy
- Since the middle of the 20th century, profound changes have taken place in the structure of the world economy. Since the industrial revolution, the proportion of manufacturing industries that have long dominated in the western countries national economies has gradually decreased and their role has been weakened. Various types of emerging and diverse services The sector is booming, and the global economy is entering an era of service economy.
- With the development of the service economy, the status and role of services in the socio-economic are increasingly contested. The service level of a country also reflects the country's socio-economic development level and international competitiveness. The following table shows the proportion of service industries in the national economy in some countries.
|
|
| ||
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Source: OECD in figures, 2004 edition.statistics on member Country, OECD, Paris. The original table is on the ninth page. The figures in China are added by the compiler, not in the original book. "Service Marketing and Management: A Strategic Perspective" P6-7
- Attachment: important academic staff for service economy
- Professor Zheng Jichang is the main academic leader of domestic service economics. He is currently the director of the China Service Economics Research Center (CCSE). He is also specially appointed as the chief expert of service economy by the National Development and Reform Commission and the Ministry of Commerce. Member of the Eleventh Five-Year Plan for the Development of Service Industry. With deep academic accomplishments, he enjoys a high reputation in the domestic service industry economic research community.
Specific performance of service economy
- (I) The trend of upgrading the internal structure of the service industry is obvious
- The upgrading trend of the internal structure of the service industry is manifested as the service industry shifts from labor-intensive to knowledge-intensive, and modern service industries with high levels of knowledge and technology gradually occupy the dominant position of the service industry. From the perspective of industry input factors, agriculture is mainly constrained by natural resource elements, manufacturing is mainly constrained by physical capital elements, traditional service industries are mainly constrained by labor factors, and modern service industry employees have overall high education, high professional titles, The characteristics of high salary indicate that the modern service industry is mainly constrained by human capital factors. Theodore Schultz (1961) proposed the concept of human capital. He believed that human capital is the capital condensed on the laborer, transformed through investment costs, and expressed as laborer's skills and skills. Accumulative. Studies by Lucas (1998) and Romer (1990) have shown that high-quality economic growth mainly comes from the effective accumulation of human capital stock. The author believes that the upgrading of the internal structure of the service industry is essentially a concentrated expression of human capital gradually replacing material capital to lead economic growth. This upgrade is driven by economic development, deepening of division of labor, and technological progress.
- Economic development has made human capital increasingly important for modern economic growth. In 2004, the economist Robert Fogel gave a high evaluation of the contribution of human capital to modern economic growth. This revolutionary understanding has stimulated people's desire for improvement of their own qualities and driven investment motivation for human capital. From the perspective of individual people and the country as a whole, it is urgently felt that it is a very urgent and necessary task to invest in their own qualities and national qualities to enhance the competitiveness of individuals and the country. Since the 1990s, the World Bank s aid loan policy for developing countries has also been adjusted accordingly. From the early stage, investment in infrastructure was shifted to the field of human capital investment.
- Service Economy Related Works
- Technological progress has driven the development of some modern emerging service industries such as management, consulting, and advertising services. The services provided by these service industries are increasingly based on the responsibility to carry professional knowledge, expertise or information, which means that the "service" products themselves are also "knowledge" and "informatization". On the other hand, the service industry has improved its productivity level unprecedentedly through the use of continuously improving information technology. That is, the production technology of the service industry is also "knowledge" and "informatization." The world has grown tremendously. Information technology has realized large-scale operation of service products on a global scale. For example, Wal-Mart and Carrefour are outstanding representatives of global chain operations.
- The upgrading trend of the internal structure of the service industry is particularly evident in developed countries. After experiencing the stagflation of economic stagnation in the 1970s, Western countries successfully upgraded the internal structure of the service industry and successfully achieved healthy and stable economic growth. Studies have shown that countries with an internal structure of the service industry showing an upward trend will also have greater stability in their national economic structures. To a considerable extent, the economic "service" of developed countries is actually "knowledge" or "informatization". Among the countries of the World Economic Cooperation Organization, the added value of service industries such as finance, insurance, real estate and business services accounted for more than one-third of GDP.
- (2) Increasing global competition in the service industry
- With the continuous increase in the openness of service markets in various countries, the pattern of global competition in the service industry has basically taken shape. Second, the rapid rise of multinational service companies has intensified competition in the global service industry. It is represented by the global expansion of multinational service companies in developed countries, such as the international retail giants Wal-Mart and Carrefour. The overseas sales of these multinational retail giants account for almost 50% of their total sales. In addition, there are many outstanding representatives operating globally in the financial industry and business service industries. These areas have also become the key expansion areas for multinational service companies.
- With the full opening of China's service market, China will certainly become one of the fastest growing markets in the world's service industry. Global multinational service companies are targeting the Chinese service industry market with huge potential for development. At the end of 2004, United Parcel Service of the United States (UPS) promised to add US $ 600 million to China's express delivery industry in 2005; in March 2005, Holland International Group and Deutsche Bank took shares in Bank of Beijing, holding 20% of the bank and % Shares; On March 19, 2005, Deloitte Accounting Firm signed an agreement to acquire Beijing Tianjian Accounting Firm, the largest domestic accounting firm in China, and plans to invest USD 100 million in the next 4 years. On April 6, 2005, One of the world's largest management consulting companies, BearingPoint's chairman, McGregor Rhode, visited China Construction Bank to launch public relations activities in order to enter China's financial industry consulting services.
- (3) Gradual service of global manufacturing
- On the one hand, the professional services of many manufacturing companies are outsourcing, which makes the manufacturing and service industries increasingly dependent on each other. Since the 1990s, American companies have been committed to improving their core competitiveness, and outsourcing their professional services globally. This successful operation has greatly improved the global competitiveness of American products and services. On the other hand, the enthusiasm of service manufacturing in the service economy is unprecedented. Many manufacturers, such as automobiles, home appliances, and computers, pay as much attention to managing their services as service companies. These manufacturers have recognized that global competition requires the provision of services. Excellent service. Services are becoming a vital means of competition and provide the key potential to form a huge competitive advantage.
- From GE, Xerox, Hewlett-Packard, IBM to Haier, these profits are mostly transformed into service providers. General Electric intends to generate 75% of its profits through services. IBM gets 33% of its revenue from basic services it does for the hardware business, including computer rental, repairs, and software. Too many manufacturers are quickly involved in the service, more and more services are added to the basic production of goods, deferred payment and leasing systems, training, service contracts, consulting services, etc. to gain competition through new service areas Advantage. 65% and 76% of employees working in manufacturing are also engaged in service work, such as R & D, maintenance, design, etc. It can be seen that today's leading manufacturers gain competitive advantage by adding services to their traditional manufacturing business. If competition imitation is increasing in the world, then service is the main means of creating differences. Manufacturing companies in the service economy are increasingly relying on services as an important means of competition, and manufacturing will gradually become service-oriented. Service has become the dominant factor in today's global economy.
- China's Strategy and Practice for Developing a Service Economy
- Almost all highly developed countries in the world today have become "service economies", while China's service economy development level is relatively backward. Thinking from another angle, this means that China has huge space and potential for developing the service economy in the future. Among them, the productive service industry is regarded as the best breakthrough area for China's comprehensive transformation to a service economy.
Service economy government advancement
- According to the latest statistics from the World Bank, the value-added of the service industry in GDP and the proportion of service industry employment in total employment in major developed countries in the world have mostly exceeded 70%. The average level of these two indicators in developing countries is 45 %. In other words, the developed countries in the world have formed an industrial structure dominated by the service economy, while the developing countries are forming an industrial structure dominated by the service economy. China's development of a service economy is the general trend.
- At present, the global economy has entered another round of cyclical adjustment, which heralds the emergence of a new round of opportunities for the development of productive services. History has proven that there is an inevitable correlation between the economic cycle and the development of productive services markets. The subprime crisis that began in 2007 is likely to cause another economic bottom and bring new opportunities for the development of productive services markets. China, which is increasingly integrated into the global economy, should seize this opportunity.
- Speeches on Service Economy Related Conferences
Great potential for service economy
- The service economy-based industrial structure includes five major economic activities: service output, service industry employment, service consumption, service trade, and service industry investment. The comparison found that China's indicators for the five leading components of the service economy are low.
- In 2007, China's value-added of the service industry accounted for 41% of GDP, slightly lower than the average level of developing countries. China's service sector accounted for 32.4% of the country's total employment, far below the average level of developing countries.
- China's service consumption is also low. In 2006, the per capita service consumption expenditure of Chinese urban residents accounted for only 28.1% of total consumption expenditure, which was far lower than that of developed countries and similar developing countries. China is a large exporter of merchandise trade, but the development of trade in goods and services is extremely uneven. In 2007, the proportion of China's service trade exports to total exports was only 6.8%, less than half of the world average of 20.9%. In the past 20 years, China's service industry has used less foreign direct investment, only 20% to 30% of the total, far lower than the foreign investment attracted by the manufacturing industry.
- The above statistics conclude that China's service economy is relatively backward. Thinking from another angle, these data mean the huge space and potential for China to develop a service economy in the future.
Expected return on service economy
- China's service industry has been developing rapidly in the past few years, but traditional manufacturing is still the pillar industry of the national economy, and a large amount of labor has not been released from the land. The development of a service economy can change the backward status quo of China's industrial structure, change the proportion of the three major industries, reduce energy consumption and environmental pollution, increase employment in urban labor forces, and achieve long-term sustainable economic development.
- Reduce energy consumption and reduce environmental pollution: China's manufacturing sector has a large proportion and its energy consumption proportion is also large. Energy consumption then brings pollution problems. In comparison, the service industry consumes less resources and is an energy-saving industry. From the world average level, the energy consumption intensity of manufacturing industry is six times higher than that of service industry. Not only that, the environmental pollution of the service industry is small, and it is an emission reduction industry. According to data released by the Nanjing Municipal Bureau of Statistics, the smoke and dust emissions and sulfur dioxide emissions caused by each 10,000 yuan of value added generated by the Nanjing service industry are only 4.8% and 3.2% of the manufacturing industry. The advantages of the service industry in reducing energy consumption and pollution help achieve long-term sustainable development of the Chinese economy.
- Increasing jobs and alleviating employment difficulties: According to statistics, more than 80% of new jobs in Chinese cities and towns from 2003 to 2007 came from the service industry. The service industry has traditionally been an area that attracts a large number of graduate employment. In 2007, more than 80% of American college students entered the service industry. In EU countries, at least 75% of graduates in 2008 entered the service industry. The situation in China is similar.
- Drive the upgrading and transformation of China's manufacturing structure: China's manufacturing industry has a very low level of service. 97.8% of Chinese companies are manufacturing-driven rather than service-driven. As a result, companies are generally subject to product homogeneity, falling profit margins, and consumer demand. Increasingly challenging.
Service economy meets challenges
- First of all, the development of product-based value-added services or service-oriented solutions by manufacturing companies can increase the differentiated advantages of products that are difficult to replicate and comprehensively improve the customer experience, thereby getting rid of pure price competition and consolidating or even increasing product market share. And develop a broader and more sustainable source of revenue; second, manufacturing companies use operational advantages in R & D, supply chain, sales and other value chains to develop professional service capabilities and help customers strengthen their operations and business support capabilities, thereby forming new Competitive advantage to achieve sustainable development. If manufacturing companies further strip internalized productive services and become independent third-party professional service providers, it will help the innovation and development of the manufacturing industry and structural upgrade, and accelerate China's transition to a service economy.
Service economy development direction
- The Chinese government has realized the world trend of developing the service economy and set out to guide China's service economy development direction. In 2006, the Chinese government determined the general direction and basic ideas for the development of China's service industry.
- In 2009, the international financial crisis continued to spread, the world economy fell sharply, and foreign demand weakened significantly. Faced with a relatively difficult external economic environment, the Chinese government proposes that the current economic work should focus on the overall situation of "maintaining growth, ensuring employment, protecting people's livelihood, and maintaining stability", vigorously promote the strategic adjustment of economic structure and accelerate the development of modern service industries.
- City government targets production services
- The development of the service economy and the formation of a service economic structure are closely related to the process of urbanization. Urbanization is the demand basis for the development of the service industry. Only when the production factors and population have gathered to a considerable scale and generate strong market demand for productive services and consumer services, can it be sufficient to support the continuous professionalization and rapid development of the service industry. Based on this correlation, the Chinese government proposes that large and medium-sized cities with conditions should gradually form an industrial structure based on service economy.
Service Economy Development Steps
- Specific to cities at all levels, government departments can guide and promote the transformation and development of the local service industry in three steps.
- Step 1: Focus on Productive Services
- What is productive service? As its name implies, productive services are the opposite of consumer services. From the perspective of the service object, it does not directly meet the final consumption demand, but meets the intermediate use demand of the producers of goods and services for the service, and also meets the final use demand of the service including government consumption, exports, and capital formation. In terms of service objectives, productive service industry refers to the service industry that maintains the continuity of the production process of goods and services, promotes technological progress, industrial upgrading, and provides guarantee services for improving production efficiency.
- Along with the upgrading of the entire industrial structure to the tertiary industry, productive service activities that provide producers with pre-, mid-, and post-natal services have become a key input for the manufacturing industry and an important driving force for improving economic efficiency. Compared with the manufacturing and consumer service industries, the profitability and productivity of the productive service industry are higher, and the proportion of productive services in the total output of the service industry has been increasing for many years. For example, the average profit margin of the banking and information transmission industries exceeds 10%, while the profit margin of the manufacturing industry is less than 4%.
- The pioneering industrialized countries have changed their economic growth model, which is mainly driven by physical capital and resource inputs, and instead have continuously improved economic efficiency through human capital accumulation and technological innovation.
- Step 2: Select key service industries
- After determining the general direction of the development of the productive service industry, the next issue that the city government should consider is based on the unique local situation, selecting 2 to 3 key industries, and developing a differentiated development strategy in a targeted manner. "And" Copy as-is "ideas and practices. The decision-making department must first have an objective and neutral understanding of this position.
- The overall position of a city includes such factors as talent status, industrial base, geographical location, infrastructure and urban environment. Among the five major influencing factors, the first three play a decisive role in the development of productive service industries in cities.
- The overall position of a city is superior, the higher its economic development level, and the greater the development potential of the service industry. The overall position of a city is the fundamental starting point for government decision-making departments to formulate a service development strategy. Different types of cities have slightly different emphasis in specific applications. For cities with a better overall position, their industry choices are relatively large. The local government needs to carefully identify the unique advantages of me in order to formulate a differentiated service strategy and effectively promote the transformation of the urban economy into services. For cities with a poor overall position, their starting point for the development of the service industry is relatively low. The local government should strengthen strategic guidance and urge cities to jointly improve a certain position, such as focusing on talent training, thereby increasing the development of certain types of service industries. Confidence and staying power. For cities that are significantly superior in overall position and ahead of service industry development, local governments need to look to the future when formulating service development strategies, and promote industrial upgrading and long-term sustainable development of the service industry through innovative incentive policies and incentives.
- When selecting service industries for key development, cities should also consider the industrial cluster effect of the urban agglomerations in which they are located. A modern city is not an isolated individual. It forms a high-density, closely related urban group with surrounding cities. The concentration of human resources and industrial focus in the group is quite high. In such a city group, an industrial cluster composed of many individual enterprises can produce cluster effects such as external economic effects, savings in transaction costs, synergistic effects, and the effects of learning and innovation. From the perspective of industrial clusters, selecting service industries for key development can help cities to give full play to the effects of clusters, enhance the competitiveness of enterprises and enhance the competitiveness of industries, and then promote the sustainable development of the entire urban agglomeration economy.
- The overall position of a city largely determines whether it can attract potential investment in the service industry, and this is one of the biggest challenges facing city governments. How to attract investment that really suits the needs of urban service economy development? The pre-emptive city government will first determine the advantages of the industrial cluster in the area, and then increase the overall position around this cluster advantage. At the same time, city governments need to change their mindset and no longer stick to the existing cluster advantages. Instead, they must expand and expand the existing cluster advantages by improving the education environment, talent development, and investment in technology research and development to attract new ones. investor.
- Step 3: Fill the gap and build long-term competitive advantage
- As mentioned earlier, the overall level of China's service economy development is not high, and the development level and speed of service industries in various cities are very uneven. After in-depth research and analysis, we find that the following six gaps are common in Chinese cities. These gaps hinder the healthy and rapid development of urban productive services.
- 1. Structural talent shortage. Although it is a country with a large population, the problem of structural talent shortage in China is quite prominent, and there is a lack of composite mid- to high-end talents (both comprehensive talents who know both technology and foreign languages and management) and applicable technical talents (such as basic programmers who are skilled in programming); Insufficient education and training in the service industry and lack of financial, taxation, and credit support. According to the statistics of the National Development and Reform Commission, nearly 50% of China's high-end service industry positions cannot recruit enough and suitable talents. At the same time, nearly 1.5 million college graduates in China could not achieve employment in 2008, and the unemployment rate of college students exceeded 12%, which is about three times the registered unemployment rate. With appropriate employment training, these college students are likely to fill vacancies in these service industries.
- 2. Lack of guidance and encouragement policies. Governments at all levels have insufficient understanding of the laws governing the development of the service industry, lack relevant supporting policies or measures, and the existing policies are not targeted and feasible. The government continues to "prefer" manufacturing industries, so that manufacturing companies enjoy greater preferential policies. Unwilling to spin off internalized productive services, such as production logistics; the existing preferential policies for the service industry are too high, and small and medium-sized service companies have obtained market access, credit guarantees, financial services, talent training, etc. The government's support is not enough, and the enthusiasm for entrepreneurship and innovation is not high.
- 3. Incomplete infrastructure. Most cities lack a complete IT infrastructure and supporting application platforms, and cannot fully meet the needs of (small and medium) service companies to conduct business. Beijing s broadband coverage rate is 55%, which is far lower than the average coverage rate of 80% in London, New York, and Tokyo. The situation in other second- and third-tier cities in China can be imagined.
- 4. Poor availability and access to government public services and inefficient supply. The per capita government financial expenditure in Chinese cities is generally low, and the government's investment in public services is insufficient; there are too many administrative approval projects and links, and the rate of work is low; scattered government functions, isolated data and process management, and lack of coordination; government departments Inadequate use of advanced information technology to provide public services. For example, the average customs clearance time for Shanghai companies is 8.7 days, compared with 5.3 days for South Korea, which is 1/3 faster than China.
- 5. The ecological cooperation system is not perfect: the entire people lack advanced service awareness and service concepts. Consumers and customers have not fully recognized the value of third-party services; the standardization, standardization, and integrity of services are insufficient; governments, enterprises, industry associations, and citizens need to establish a healthy and sustainable collaborative relationship.
- 6. The urban environment is unattractive. Many cities have certain deficiencies in the business environment (such as business infrastructure, corporate culture and systems, etc.), the social environment (social order, social security, urban-rural coordination, etc.) or the living environment (such as housing, education, health care, and ecology) Reduced ability to attract funds and talent.
Serving the economy to promote development
- The new trend of developing the service economy has placed many new and higher requirements on the Chinese government, especially city governments. China should understand the development law of productive services from a strategic perspective, and give full play to the government's market cultivation, standardization, and regulatory functions, from systems and policies, talent development, infrastructure improvement, public service transformation, friendly environment creation, and ecological collaboration systems. Take action in six areas to guide market stakeholders, institutions, social organizations and other stakeholders to coordinately and orderly promote the transformation and development of the urban service economy.
- Affected by the world economic recession, China's economic growth has slowed down, but China's strategy of transitioning to a service economy has not wavered. On the contrary, the economic slowdown has provided the Chinese government and enterprises with a deep opportunity to catch up with advanced opportunities. Chinese governments at all levels play a key guiding and coordinating role in the transformation and development of the service economy. City governments need to first formulate a differentiated service economy development strategy, then build and improve the city's service economy system, and guide various stakeholders to coordinately and orderly promote the transformation of the city's service economy to achieve sustainable development of the Chinese economy.