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English report 1998
SERVICES & INTERNATIONALISATION - John R. Bryson. 1 -
Introduction.
Introduction
This report is being written from
a location in what was once called the 'workshop of the world'. The
West Midlands used to dominate the economy of the United Kingdom as it
was the centre of the motor vehicle industry. The West Midlands is a
suitable place in which to begin a review of service research in the
United Kingdom as it highlights an importance feature of the focus of
service research in the UK - the belief that manufacturing and service
activities are interdependent (Bryson, 1997a). Birmingham City Council
has been concerned for the last four years about the underdeveloped
state of the city's business service sector. The local authority is
aware that manufacturing companies will not remain competitive without
access to an active and innovation business service sector. A key
feature of the UK economy is the unequal distribution of business
service activities, with the well-documented concentration in the South
East. The on-going restructuring of the UK financial service industry
is driving some of these changes with closure of retail branches and a
policy by some backs to target better off consumers with telephone
banking services provided from call centres located in the north of
England and Scotland. Bank mergers and the conversion of building
societies to public companies have also impacted on these changes.
In its is economic review for the period 1996-97 Birmingham City Council note that: [m] anufacturing is expected to be the main driver of economic growth, contributing directly more than a third of the total growth . . . [and that the] service sector is expected to grow more slowly in the [West Midlands] than in the UK' (Birmingham City Council, 1997: 1). One of the most importance issues for the West Midlands economy is a shortage of land in the city for the expansion of manufacturing activities, and a shortage of quality office space. These factors have resulted in a relocation of business activity from Birmingham to other counties in the West Midlands. This is trend which has been a feature of the UK economy since the 1960s with the relocation of office activities from Central London to the Rest of the South East, and a continual shift of especially business service and financial service activity away from the City of London to cheaper locations. May 1997 witnessed the election of a Labour Government on a manifesto constructed around equal opportunities in employment, a minimum wage, a New Deal for the unemployed and a restructuring of the National Health Service, a review of the educational system, and a restructuring of higher education. The election of Labour Party to power after an 18 year period of Conservative Government will have a major impact on both the UK economy and the nature of work. Of especial concern at the moment is a shortage of skilled labour in parts of the country. For example, companies based in the Midlands have to recruit staff from London and the South East. To complicate matters the UK still has a relatively high proportion of its workforce with few or no qualifications. as a result, companies experience difficulties in recruiting skilled individuals. In 1991, an analysis of the growth in the total stock of firms in fast-growth sectors revealed that artists, designers, authors, composers and freelance journalists had the fourth fastest growth rates (Keeble, et.al, 1991). Creative workers including designers and musicians, are the United Kingdom's fastest-growing occupational group. Many of these jabs are well-paid, and many play and important part in the design of manufactured products. Many of the economic, social and political trends identified above are not yet apparent in the academic literature. The trends, do, however suggest a number of clear avenues for further research which will be highlighted in the conclusion of this report. Producer
services
Business or producer service
activities have been a major area for research in the UK over the last
10 years. This continued during 1997 and can be divided into three types
First, the work of O'Farrell and Wood into the tradability of business services continued, but no publications were forthcoming in 1997 (0'Farrell et.al, 1998). This work has made a significant contribution to understanding international relationships between business service companies as well as highlighting regional differences within the UK. This work also includes empirical findings from the Amsterdam urban region of the Netherlands. This supply-side perspective on the tradability of business service expertise would benefit from research into the decision-making process of client firm employing foreign business service expertise. For example, why does an American company decide to employ the service of a British business service company? Secondly, the work of Bryson and Daniels funded by the ESRC and NatWest Group Charitable Trust into small and medium-sized enterprises (SMEs) use of external business service expertise has continued work into externalisation. This work is partially a response to the establishment in 1992 by the Department of Trade and Industry of the Business Link network, a national chain of one-stop-advice-shops for the local provision of business support services to SMEs in England. The rationale behind this initiative was to provide a single point of entry for SMEs to a wide and integrated range of business support services. Proposals for Business Links were developed by local partners (Training and Enterprise Council Chamber of Commerce and Local Authorities) and assessed by a national assessment panel. The research on SMEs and their use of external advice and expertise has highlighted both the interactive/person-to-person nature of the expertise exchange as well as the localised nature of business service employed by SMEs. The localised nature of business service expertise has been found in a study of Norwegian business service use by manufacturing firms (Rusten, 1997). The research highlights the 'weak-ties via which SMEs acquire access to external expertise. Of especial interest is the focus of this research on the types and nature of the knowledge flows which are flowing into companies. This has highlighted the 'recipe nature' of business service expertise. Part of this research project is also challenging the division between manufacturing and service activities as case study research makes it apparent that many manufacturing companies are in effect service companies. Thirdly, Kirby in combination with a variety of co-authors published three papers in 1997 on business service firms. The relationship between a small firm and its accountant is explored in Kirby and King, 1997. Using two surveys of small business and accountancy companies they reveal a mismatch in the expectations of these two groups. Client perceives that their accountant has a lack of knowledge/expertise of their business. They suggest that accountants need to alter their attitudes to SMEs while SMEs should be aware of the manner in which accountants can improve their managerial performance. . More research needs to be undertaken into the relationships between clients and their accountants taking into consideration the relationships between an internal and external accountant. In two related papers Kirby and Jones-Evans (1997) and Kirby et.al. (1997) explore small technical consultants. This work is important for two reasons. First the approach is qualitative employing 'narrative text' to explore transcribed interview material. This provides a happy compromise between a quantitative and traditional qualitative style of analysis. Secondly, a comparative analysis of technical consultants in Hungary, Poland and the UK is made in Kirby, et.al (1997). This highlights the growth of new-knowledge-based small firms in eastern Europe, but in contrast to the UK they are the result of 'forced' entrepreneurship. In the transition economies consultant also appear to maintain a long-term relationship with their former employer. This suggests that there are important structural difference between economies in relationship to the formation and use of business service companies.
Financial
services
Three important books in the area
of financial services were published in the UK during 1997. First,
Leyshon and Thrift provided a collection of (old) published essays, and
[new] introductions commentaries which, not only, discuss the world
geographies of international money, but also, make a significant
contribution to our understanding of the different ways in which money
has been socially and culturally embedded at the global-local scale.
The book contains material which goes back as far as 1986, through to
the 1990s. This collection provides a convenient medium to access the
work of Leyshon and Thrift, but the work does not contain much material
produced after 1994.
Secondly, Linda McDowell's book written around her ESRC-funded project into gender relations in the financial service sector in the City of London. This is a fascinating and detailed study of life and work in one of the most important global financial centres. The analysis uses transcripts from interviews held with employees of three merchant banks. The book is important for highlight the social and gendered aspects of the City of London. Reading it prompts a whole series of questions concerning the way in which financial services operate. The emphasis on gender in McDowell's analysis obscures many of the more fundamental issues and questions which have not been addressed. For example we have limited understanding of: the operation and activities of financial and corporate analysts in the City, the investment decisions of individuals, the decision-making process of pension funds and other forms of financial institution, the information and the knowledge flows which feed into the City. What is required is a detailed ethnography of the City, and would argue that this should have come before an attempt to understand less important issue of gender segregation. Thirdly, Morgan and Knights (1997) provide an edited collection on European financial services. This is an important collection if only for the chapter by Sturdy et.al (1997) which explores differences between France and the UK in the way in which insurance and banking products were sold through the bank networks. The important point that one cannot understand financial services or products without understand their historical and national contexts. Culture, and organisational development are all important in understanding the development and evolution of economic activities. Financial research as well as financial services in the UK are dominated by American ideas and concepts. Most UK academics will be ill-informed about circumstances on the continent and Morgan and Knights collection goes some way to overcoming this deficiency. Consumers
services
Retailing has until relatively
recently in the UK between undeveloped both conceptually and
empirically. Over the last four years there has been an important
revival in this area with the realisation that there is a close
relationship between production and consumption and between consumption
and identity construction. This area has benefited from the work of
anthropologists such a Daniel Miller, and geographers like Nigel
Thrift. Three important books were published in 1997. First, Du Gay's
(1997) edited collection published as part of an Open University
Course. The emphasis of this work is on what Du Gay terms 'cultural
economy' or on 'the mutually constitutive relationship between
'culture' and economy' (p2). The most important chapter is written by
Du Gay himself when he underlines the argument of the whole collection
by suggesting that 'the identity of services is simply not amenable to
representation in terms of a binary divide between 'economics' on the
one hand, and 'culture' on the other. Rather than 'solely' either an
'economic' or cultural' phenomenon, service work is a hybrid of both'
(p. 318).
Secondly, tourism research in the UK has been until recently an areas without a convincing conceptual framework (see Oppermann and Kye-Sung, 1997 for a conventional study of tourism). The work of John Urry (1990) provided an alternative way in which to think about the tourist experience. This book has until recently remained within the sociological and geographical literature rather than becoming part of the literature of tourist research. Ryan's (1997) edited collection on the tourist experience is one of the first attempts to combine Urry's work with that if tourist researchers. The book is worth consulting if only to see how Urry's ideas have been incorporated into traditional tourist research. Ryan's book hopefully heralds the beginning of a renaissance in this research (see also Sharpley and Sharpley, 1997). This is especially important given predictions that tourism is rapidly becoming the world's most important industry. Tourism research is dominated by applied studies and textbooks which operate as best practice manuals. Thus, human resource management, hospitality management (Goldsmith et.al, 1997) and working practises in hotels and catering (Wood, 1997) dominate traditional tourist research. What is missing from this literature is research into the nature of tourist work, into the workplace geography of tourist spaces, into the production and consumption of the tourist environment, and into gender and ethnicity both at the level of tourist work and of the tourist (see Traves et.al., 1997) Thirdly, Williams (1997 a & b) has provided an alternative way of conceptualising consumer services. In a book and a number of papers William's attempts to retheorise consumer services as contributing to local economic development. Of especial importance is the recasting of the internal multiplier effects of consumer services in local economic development with a realisation that the growth of a local economy is dependent on attracting external income, but also on preventing the leakage of money from the area. This raises a number of important policy issues concerning the nature, quality, and maturity of consumer services in a local economy. Encouraging the development of manufacturing and business service industries in a region with an underdeveloped consumer economy will only lead to the export of much of the money to regions with a well developed and mature consumer sector. An argument can also be made over the attraction consumer services have for tourists as well as for inward investment. Public
services
The new labour government will
have a dramatic impact on the geography, structure and operation of
public services. Marshall et.al (1997) as part of a long-term study
into the restructuring of the civil service in the UK. The interesting
aspects of this research is that it appears to suggest that the UK may
be witnessing the demise of a national civil service as a consequence
of the formation of agencies and the gradual disappearance of national
recruitment, pay and conditions of service. This will have important
implications for peripheral economies in which the civil service was
considered to be a provider of good salaries and conditions of
employment.
Menu Conclusion
and areas for further research.
Two common themes can be
identified from service research in the UK. First an emphasis on the
relationships between services, culture and economy. Research in this
area is highlighting the social aspects which underpin the
competitiveness of service activities and employment. Thus the success
of both financial services and producer services rests on trust at both
the level of the individual and the firm. The financial system is
underpinned by relationships between people at both the level of the
City, and at the global scale. To understand flows of funds globally
necessitates an understanding of these relationships. Secondly, an
important shift in emphasis is towards understanding the shift in
employment and organisations towards knowledge work (Albert and Bradley
(1997). Research is exploring the nature and characteristics of
knowledge work as well as investigating the function and operation of
knowledge or information-rich companies. Information and knowledge are
now central to the research agenda of many of the social sciences in
the UK.
This review has already highlighted a number of areas which require further research. Four areas are under-researched in the UK First, much of the service work is exploring the operation and activities of small service companies. Research must begin to explore the activities and the nature of service work in large companies. Secondly, work on financial services has focused on general accounts of the operation of the City of London, or on an analysis of gender. A detailed ethnographic study of the operation of financial services in a global city is urgently required. Provincial financial centres should also not be forgotten as these may service individual investors rather than institutional investors. Thirdly, research needs to be undertaken into manufacturing companies which are becoming more services orientated, and into service companies which are now manufacturing a physical product. This leads on to the final point which is that the distinction between manufacturing and services activities is breaking down in the UK economy. This implies that academics must reconsider the way in which they conceptualise economic activities.
Albert, S. and Bradley, K.
(1997) Managing Knowledge: Experts, agencies and organizations,
Cambridge University Press
Allen, J. and Thompson, G. (1997) 'Think global, then think again - economic globalisation in context', Area, vol 29-3 Bachtler, J. and Raines, P. (1997) 'Government Incentives and the Financial Services Sector in Scotland', The Service Industries Journal, Vol. 17: 3, 456-474 Birmingham City Council (1997) Birmingham Economic Review: 1996-97, Birmingham City Council Economic Development Unit. Bryson, J.R.(1997a)'Business Service Firms, Service Space and the Management of Change', Entrepreneurship and Regional Development, vol. 9, pp. 93-111 Bryson, J.R. (1997b) Small and medium-sized enterprises, Business Link and the new knowledge workers, Policy Studies, vol 18, 1: 67-80 Bryson, J.R (1997c) Small and medium-sized enterprises, Business Link and the new knowledge workers, Small Firms Business Services Project, Working Paper No 3, University of Birmingham Bryson, J.R. (1997d) Business Link, Strong Ties and the Walls of Silence, Small Firms Business Services Project, Working Paper No 4 University of Birmingham Bryson, J.R. (1997e) 'Business Service Firms, Service Space and the Management of Change', ESRC Centre of Business Research Working Paper No. 62, University of Cambridge, 39 pages Bryson, J.R., Churchward, S. and Daniels, P.W. (1997) 'From Complexity to Simplicity? Business Link and the Evolution of a network of one-stop-advice shops: A response to Hutchinson, Foley and Oztel', Regional Studies, vol 31, 7, 720-723 Bryson, J.R and Daniels. P.W. (1997) Small and medium-sized firms and their use of external sources of advice and expertise in the United Kingdom: Some empirical findings Small Firms Business Services Project, Working Paper No 2, University of Birmingham Bryson, J. Keeble, D. and Wood, P (1997) 'The creation and growth of small business service firms in post-industrial Britain', Small Business Economics, vol. 9, 4, 345-360 Capron, H. and Debande, O. (1997) The role of the manufacturing base in the development of private and public services', Regional Studies, Vol 31, 7: 681-694 Dicken, P. and Tickell, A (1997) 'Putting Japanese investment in Europe in its place', Area 29: 3. du Day, P. (Ed) (1997) Production of Culture/Cultures of Production, Sage, London Goldsmith, A., Nickson, D., Sloan, D. and Wood, R.C. (1997) Human Resource Management for Hospitality Services, Thompson Business Press, London Hitchens, D.M.W.N. (1997) 'The adequacy of the supply of professional advisory services to manufacturing firms in rural mid-Wales', The Service Industries Journal, vol 17 4: 669-690 Keeble, D. Bryson, J and Wood, P. (1991a) 'Small firms, Business Services Growth and Regional Development in the United Kingdom : Some Empirical Findings', Regional Studies, Vol 25, No.5, pp.439-57 Kirby, D.A (1997) 'Small Technology-based professional consultancy services in the United Kingdom', The Service Industries Journal, vol 17, 1 : 155-172 Kirby, D.A. and King, S.H. (1997) 'Accountants and Small Firm Development: Filling the Expectation Gap', The Service Industries Journal, vol 17, 2: 294-304 Kirby, D.A., Jones-Evans, D, Futo, P, Kwiatkowski, S. and Schwalbach, J. (1997) 'Technical Consultancy in Hungary, Poland, and the UK: A Comparative Study of an Emerging Form of Entrepreneurship', Entrepreneurship Theory and Practice, 20, 4: 9-23 Leyshon, A. and Thrift, N (1997) Money/space: geographies of monetary transformation, Routledge, London Marshall, J.N., Hopkins, W.J. and Richardson, R. (1997) 'The Civil Service and the Regions: Geographical Perspectives on Civil Service Restructuring', Regional Studies, Vol 31, 6: 607-630 Marshall, J.N., Richardson, R., Raybould, S. and Coombes, M. (1997) 'The transformation of the British Building Society Movement: Managerial Divisions and Corporate Reorganisation, 1986-1997, Geoforum, 28, 3-4: 271-288 McDowell, L.M. (1997) 'A tale of two cities? Embedded Organisation and Embodied Workers', in Lee, R. and Wills, J. (Eds) Geographies of Economies, Arnold London, 118-129 McDowell. L. (1997) Capital Culture: gender at work in the city, Blackwell, Oxford Morgan, G. and Knights, D. (1997) Regulation and deregulation in European Financial services, Macmillan Business, London O'Farrell, P, N. Wood, P.A. and Zheng, J. (1998) 'Regional Influences on Foreign Market Development by Business Service Companies: Elements of a strategic context explanation', Regional Studies, vol 32.1: 31-48 Oppermann, M and Kye-Sung, C. (1997) Tourism in Developing Countries, Thomson Business Press, London Rusten, G. (1997) Outsourcing strategies and geography: business service use by manufacturing firms, Working paper no 49/1997, Foundation for Research in Economic and Business Administration, Bergen Ryan, C (ed) (1997) The Tourist Experience: A new introduction, Cassell London Sharpley, R, Sharpley, J. (1997) Rural Tourism, Thomson Business Press, London Sturdy, A., Morgan, G. and Daniels, J. (1997) 'National Management Styles: A Comparative Study of Bancassurance in Britain and France', in Morgan and Knights (Eds). ; 154-177 Traves, J., Brockbank, A. and Tomlinson, F. (1997) 'Careers of Women Managers in the Retail Industry', The Service Industries Journal, vol 17, 1: 133-155 Urry, J. (1990) The Tourist Gaze, Sage, London Williams, C.C. (1997a) 'Rethinking the role of the retail sector in economic development', The Service Industries Journal, vol 17: 205-220 Williams, C.C. (1997b) Consumer Services and Economic Development, Routledge, London Wood, R.C. (1997) Working in Hotels and Catering, Thomson Business Press, London Wong, C., Marshall, J.N., Alderman, N. and Thwaites, A. (1997) 'Management training in small and medium-sized enterprises: methodological and conceptual issues', The International Journal of Human Resource Management, 8, 1: 440-65 Wednesday April 21, 2004
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