Italian report 2000

R é s e a u E u r o p é e n S e r v i c e s & E s p a c e

Table des matières

1 - INTRODUCTION
2 - CULTURAL FACTORS IN THE DEMAND FOR SERVICES
3 - CULTURE AS A SERVICE
4 - CULTURE OF THE SERVICES
5 - REGULATION AND DEREGULATION IN SERVICE ECONOMY
6 - BIBLIOGRAPHY

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1. INTRODUCTION
Culture can be defined how humanity came to be where it is today.
National cultures have a direct bearing on their national economies and particular kinds of culture are best suited to economic success while others hold nations back.
What was considered as a set of purely economic processes has now become a central part of cultural processes and institutional settings.
As culture is to nations, so it is to organisations. The kind of culture an organisation has will determine its economic destiny.
Cultural values assessments achieve business improvement through the identification and rectification of issues affecting employee performance, customer service and competitive advantage.
The relationships between culture, economy and institutions are at the core of the interest of actual economic researches.
Particularly the attention is have focused on four questions:
- how cultural factors modify demand of services;
- culture as a service;
- culture of the services;
- regulation and deregulation in service economy.
This short paper outlines some of the conclusion drawn by the literature of the period of about three to five years back from now produced in Italy.

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2. CULTURAL FACTORS IN THE DEMAND FOR SERVICES

Internet culture has already changed economic field and has caused the emergence of new kinds of services.
As Internet continues to attract users and commercial applications around the globe, its relevance for the activities of major commercial banks and financial institutions is on the rise.
In fact, moving financial services to Internet creates a totally new competitive landscape. Instead of operating within clear - cut service boundaries, well-established financial organisations suddenly find themselves competing for customer loyalty and liquidity.
The advent of Web-based commerce has added new layers of complexity and unpredictability to the worlds of commercial and retail banking.
New partnerships and electronic commerce product announcements have become a daily routine for the financial services industry.
It's obvious that the momentum to move to Web-based business models is increasing and that the traditional distinctions among service providers are blurring.
Secure electronic commerce is driving change in financial services and Internet can become a universal channel for trusted settlements and exchange of value.
As the Web begins to replicate core-banking functions, a variety of nonbank institutions are ready to move into the transaction settlement business and to assume on-line trust broker roles.
Technical advances in managing networked security and digital trust are intersecting with increased consumer activity and expectations on the Web.
Attracting a significant percentage of customer to Web commerce will require enhanced convenience, value added, integrated information and simple user interfaces.
In addition to concerns about security and uncertainty about how select the appropriate service, home Internet users are still limited by dial-in connectivity speeds and hardware requirements for delivery of multimedia information and services.
On-line retail banking has instigated a desperate positioning battle among competing companies from all different sectors of the financial services industry. The number of strategic alliances among banks, software companies, on-line services, telecommunications firms and credit cards companies is increasing.
The momentum of on-line banking has picked up considerably for four reasons:
1. new distribution channels: financial institutions now have a variety of technological means to initiate on-line banking programs without incurring the heavy capital investments needed to develop their own systems;
2. no barriers entry: technology is creating a level playing field where fast moving nonbanking firms can easily provide banking products. This trend can be seen in the area of bill payments where recent innovations have provided an opportunity for nonbanks to break into the banking business, threatening one of the most profitable services provided by banks. The present nature of on-line payments is a clear indication that if the banking industry fails to meet the demand for new products, there are many industries that are both willing and able to fill the void;
3. changing customer expectations forcing the need for agility and flexibility: new technology has not only enabled an ever-increasing range of products, it has also had far-reaching effects on consumer expectations. Financial institutions understand that to meet consumer expectations they need to be flexible by separating the content (financial product) from the distribution channel (the branch);
4. digital convergence of financial management transaction: technology has enabled a convergence of a broad range of financial management activities that previously were considered disparate.
The notion of on line financial services refers to the ability to conduct bank transactions from the comfort of home (or office) using a telephone, television or personal computer. Examples of transactions include reviewing checking and savings account balances, transferring funds among accounts, paying bills, reconciling checking accounts or opening new accounts.
Characteristics that differentiate winners from losers in the competitive on-line banking industry are the willingness to take risks in terms of being a first mover, the strategic choices involved in deciding whether to partner with a software provider and the products and services to offer on-line.
With the explosive growth in Internet use, banking via the World Wide Web will undoubtedly catch on quickly. The goal of this approach is to provide superior customer service and convenience in a secure electronic environment.
The competitors in this segment are banks that are setting up their Web sites and firms that can easily move their products to the Internet.
What is important to stress is that banking on the Internet is not the same as banking via on-line services.
Internet banking means that consumers do not have to purchase any additional software (the Web browser is sufficient), they can conduct banking anywhere as long as they have computers and modems.
Consumers can download their account information into their favourite programs, which means that they do not have to follow the dictates of the service provider. Internet banking also allows banks to break out of the hegemony of software developers.
The term of electronic commerce has now become a popular label used to describe the collection of relatively recent efforts to enable the execution of financial transactions over public networking media such as Internet, cable television and telephone systems.
Current electronic commerce initiatives attempt to place the consumer/buyer, merchant and potentially the bank together in an on-line environment in which the payment transaction can be initiated and processed without human mediation.
On-line commerce still represents a rather minor percentage of total commerce but it's likely to become a major force in the future.
The factors driving this push to automated on-line electronic commerce are convenience, reduced cost of operations, lower risk and more timely information.
In addition to the impetus provided by the rapid growth of Internet users, there are other factors driving the interest in electronic commerce payments solutions today. Selling digital objects over the Web offers many advantages over more traditional business:
- it provides the customer with more choices and customisation options;
- it decreases the time and cost of search and discovery;
- it expands the marketplace from local and regional markets to national and international markets with minimal capital outlay and equipment;
- it permits just-in-time production and payments;
- it decreases the high transportation and labour costs;
- it facilitates increased customer responsiveness, including on demand delivery.
Consumers are motivated to go on line because it's more timely, cost-effective and convenient to do their business electronically.
Finally the debate about moving secure transactions to the Web is open: although the initial services being introduced use credit cards as the purchase instrument, the similar use of debit cards, on line cash and the digital equivalence of checks is being explored.

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3. CULTURE AS A SERVICE

The relation between the public and the private sector in the field of culture is the central theme of publications and articles. The question is: how to manage cultural activities?
The deteriorating financial situation of many countries, Italy included, is an important incentive to implement privatisation programmes but next to financial considerations there is also an administrative motive behind privatising cultural institutions.
It's considered wise to separate the responsibility for cultural supply and the responsibility for cultural policy.
Privatisation in culture is an important but also controversial phenomenon.
In the case of privatisation of cultural institutions (museums, theatres, orchestras, etc.) in order to eliminate bureaucracy strings and rationalise their management, the so-called third sector, based on no-profit organisations like foundations, associations, co-operatives, are probably better fit to carry out their mission by achieving a compromise between public goal and private efficiency.
Voluntary work on the part of associations and individuals is rapidly growing in the cultural sector.
Its potential in heritage field and its contribution to the operation of museums, libraries and performing art centres should by non means be undervalued.
It should be also mentioned that a less explicit but frequently used form of partial privatisation is carried out by an increase in ticket prices and user fees for cultural goods and services to make up for cuts in public funding.
In particular ticket prices in the performing art sector rose at a rate higher than inflation over the past several years. This privatisation strategy could represent an obstacle to wider access to the arts. Excessively high prices could limit the availability of artistic performances to the most privileged.
The right balance between box-office income, willingness to pay and subsidies should be more actively and effectively pursued.
All privatisation strategy could success or fail depending on the solidity of the institutional and cultural policy framework of which they are part.
The contribution of the private sector is necessary not only for economic reasons. In fact pluralism, and especially the pluralism of funding sources, is a precondition of cultural democracy.
From this perspective privatisation process contributes to the achievement of a less monopolised power game in the cultural sector.
The mix of public financing and private funding can be realised through various strategies and technical devices and it's necessary for an interesting and diverse cultural life.
Finally the position of privatised cultural institutions between state and market has opened up new possibilities for co-operation between governments, markets and no-profit institutions. These new possibilities do of course not develop without problems and difficulties.
To widen the scope of their activities cultural institutions will have to intensify their fund-raising programmes to attract money from scattered sources. But basically arts managers have an enlarged set of options to realise projects: subsidies from governments and private funds, donations, sponsoring and the help of volunteers.

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4. CULTURE OF THE SERVICES

The emerging of a culture of services has set the attention on the question of service quality particularly in the public services.
Quality has become an immensely popular term where the organisation of public services is concerned.
In health care, education, personal social services, fire services, the police and many other subsectors, commitments are being made to improve quality and increase responsiveness to the customers (clients, patients, students, users).
Measuring performance in services results difficult largely because production and sale occur simultaneously. Intangibility, perishability, simultaneity and heterogeneity, which characterise service sector, make hard to determine a firm's capability to produce in the absence of an immediate demand.
According to these arguments, there are important differences between goods and services. There are, however, further distinctions that make public services different from private sector services.
In a private sector commercial market the feedback links between seller/producer and customer/user are very direct, and serve constantly to remind the producer of the importance of meeting consumer wants.
If sales decline that is an immediate indication that something is wrong. Since the producer's revenue usually declines as the sales decline this fact cannot for long be ignored.
The possibility that the quality is too low for the price of the service is one of the things that demand immediate investigation. Perhaps another rival producer has found a way of offering the same quality at a lower price, or a higher quality service at the same price.
Either way, the first producer gets early feedback that something is going wrong, and faces immediate loss of revenue if appropriate remedial actions are not identified and taken.
In public services, feedback on quality is much less forceful. To begin with, the service is frequently provided free at the point of use, or at least at a charge which is only weakly related to costs (because it is subsidised from taxation).
Because of this many public services are faced with the problem of limiting demand.
A fall in demand can actually be a relief: less pressure, more time for professional development, research or leisure, little or on reduction in budget.
An increase in demand, by contrast, may be very unwelcome because it means more pressure on staff and facilities but probably no increase in budget.
The focus on quality in the public sector seems to have two major point of views. First, there is a producer or provider point of view in which quality is related to output and where conformance to predetermined requirements is the dominant idea.
Of course producers are not internally homogeneous so there may be tensions over who is to determine the requirements for output.
In some professionalised public services the tension is currently between managers and professionals.
Nevertheless, despite these frequently occurring internal complications, we may define producer quality as the intrinsic features of the good or service itself, as seen by those producing it.
Secondly there is a consumer viewpoint on quality and it's possible define this user quality as the quality of good or service as it is perceived by the user.
It's should immediately pointed out that the user may or not value the features or attributes which were deemed to constitute quality by the producer.
Many organisations have discovered, when they research user's wants, that they had previously possessed only a highly imperfect picture of what their users actually wanted.
User quality thus pertains to the effects (outcomes) of the goods or services that are consumed, to their utility and capacity to satisfy user wants.
Thus satisfaction (or dissatisfaction) is the result of the confrontation of expectations (individual or collective) and perceived quality.
If the perceived quality of a service was medium but the expectations had been very high, there will be dissatisfaction. On the other hand, if prior expectations had been very low then even quite a poor service may result in user satisfaction.
As a matter of fact, service quality has to be expressed as a function of consumers' expectations of the service to be provided (based upon their previous experience, the firm's image and the price of the service for example) compared with their perceptions of the actual service experience.
Service industries need to understand the types of service quality factors for their own services and understand their various relationships between perception and performance in order to design, measure and control their services.
Much of the discussion in this subsection applies to private sector as well as public. However, two factors related to the public play an important part.
First, there is the absence of market-type competition across considerable areas of the public service sector. This is important because it may restrict the development of high expectations by users who have little with which to compare the service they are receiving.
Absence of competition may also remove the incentive for producers to find out exactly what their users want.
The second special feature of the public services is the role of governments. In a sense they blur the producer/user distinction, because they represent both. They own and finance the services in question.
On the one hand they will seek to define very closely the maximum that will be on offer (producer quality), to restrict public expectations and to economise in order to please bankers and taxpayers.
On the other hand they will put pressure on public service organisations to be more responsive to users, to adhere to citizens' characters, to raise quality and so on in order to please the service users who elect them and to enhance the legitimacy of the system.

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5. REGULATION AND DEREGULATION IN SERVICE ECONOMY

One important topic in the Italian discussion highlights the question concerning regulation or deregulation in service economy: particularly some researches points out the problem of public services in a period of decreasing financial resources and increasing citizens' demand and the question of the inadequacy of Public Administration.
The fields in which the debate is occurring are telecommunications, water service, energy (both gas and electricity), transport (both motorways and railways), airports; but private health services and educational services are also under discussion.
The process of privatisation and liberalisation of the most important public services has been considered in the Italian debate as a process that doesn't require necessary actions on the structure of the sector but needs a complex system of rules.
Indeed, foreign experiments serve as a model and they prove that reorganisation of the sector is the first step in any regulation.
From an economic viewpoint, the idea of public services is mainly linked with infrastructure - especially energy, transports and communications.
These activity are distinguished by:
- their tendency towards natural monopoly, due to economies of scale and scope;
- their generality - that is the fact that they serve nearly all individuals, firms and organisations;
- their transversality - the fact that they are indispensable for the functioning of other sectors.
The free play of the market would lead these activities not only towards private monopoly, but to an especially dangerous kind of monopoly that would have control over vital sectors for the whole community.
Different degrees of intervention are possible. It may be a simple case of reducing the potential fragmentation of the suppliers, asking that they abide certain ethical principles (equality of access of service, equality of tariff treatment, and so on).
But a society might also wish to manage more directly the social and economic externalities.
The true common ground of all public services is their social-political origins: a community feels a need, a public authority responds by making a political decision.
This is voluntary intervention in the natural evolution of the market in the name of general interest.
Intervention must suppose the existence of institutions capable of carrying out these initiatives and facing the consequences in terms of funds and in political terms.
Bearing in mind the political origins of public services, it's possible to group them in two broad categories, according to the relative precision of their tasks.
In the first case the authority that creates the public service can set clear targets in advance. It can therefore draw up a precise, exhaustive set of regulations, then leave the sector to this own devices, run by one or more operators, public or private.
It would require only occasional checks to ensure that these operators respect the regulations.
In the second case the authority is unable to state its expectations from the outset. Since no regulations can cover their expectations completely, the public authorities must engage directly in the decision making process, applying a "public monopoly".

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6. BIBLIOGRAPHY

AA.VV., Cantiere cultura, beni culturali e turismo come risorsa di sviluppo locale: progetti, strumenti, esperienze, Il Sole 24 Ore, Milano, 1998
AA.VV., La banca virtuale. Aspetti tecnologici e di mercato: un'indagine sulle banche europee, sulle banche italiane e sulla clientela, ABI, Roma, 1998
AA.VV., La concorrenza nei servizi di pubblica utilità, Il Mulino, Bologna, 1998
AA.VV., La liberalizzazione multilaterale dei servizi e i suoi riflessi per l'Italia, Giuffrè, Milano, 1997
AA.VV., La privatizzazione dei servizi pubblici. Il caso Italia, SIPI, Roma, 1996
AA.VV., Liberalizzazione e concorrenza nei servizi finanziari, Edibank, Milano, 1997
AA.VV., Modelli di gestione dei servizi culturali negli enti locali. Quadro normativo e casi di studio nei musei, teatri, spazi espositivi e sistemi bibliotecari, CieRre, Roma, 1998
Bani E., Privatizzare. I modi e le ragioni, CEDAM, Padova, 1999
Basili C., La biblioteca in rete. Strategie e servizi nella società dell'informazione, Bibliografica, Milano, 1998
Dainese E., Netbanking. Banche e utenti dialogano su Internet, Apogeo, Milano, 1999
Faletti C., La banca virtuale. Le nuove opportunità di business elettronico, Zanichelli, Bologna, 1999
Magimi M., La ricchezza digitale. Internet, le nuove frontiere dell'economia e della finanza, Il Sole 24 Ore, Milano, 1999
Masetti D., Finanza on-line. Internet e finanza alle soglie del 2000 dall'informazione al trading on-line, FAG, Milano, 1999
Merlo A., Le tendenze in atto a livello di assetti istituzionali dei servizi pubblici culturali in Italia, Università Commerciale "Luigi Bocconi", Milano, 1996
Primicerio B., Total quality management in sanità, la cultura del miglioramento continuo della qualità globale nella sanità, Pozzi, Roma, 1998
Prosperetti L., Come funziona la liberalizzazione dei servizi pubblici. Un'analisi di alcune esperienze internazionali, Università degli Studi, Milano, 1998
Ridi R., Internet in biblioteca, Bibliografica, Milano, 1998

Valotti G., Imprese, istituzioni e regole nella produzione dei servizi di pubblica utilità: le condizioni per lo sviluppo della competitività, CIRIEC, Milano, 1996