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RESER 1999
- Members who have contributed to this research
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Synthesis of national reports -
In 1996 the Council of the
European Research Network on Services and Space (RESER) agreed to
conduct an annual review or synthesis of developments in services
research and policy across Europe. Service researchers based in ten
European countries were invited to identify the main trends in services
research as indicated in key publications and work in progress. This
task was undertaken for service research in general in 1996 and 1997
(Bonamy and Daniels, 1997; May and Bonamy, 1998). The annual production
of a review of all service literature has been somewhat of a daunting
exercise given the complexity and heterogeneous nature of service
activities and occupations. What restrictions, if any, should be placed
upon such a review? Which literatures should be included and which
excluded ? To address some of these problems it was decided by the
RESER Council to restrict the 1998 survey to research addressing the
issue of internationalization. It was considered that this would
simplify the task as well as ensure that the RESER annual synthesis
mirrored the theme of the annual conference. In many respects this has
made the task of producing a summary and review of the European service
literature much more difficult as the individual country literatures on
this topic are surprisingly quite limited. Maybe surprisingly is the
wrong word, as there is a substantial literature on
internationalization, but this is a literature that does not have an
explicit service focus (see for example Bryson et.al. 1999). Related to
this is an increasing trend in the Anglo-American literature for
service research to be integrated into main stream economic geography.
There are numerous papers about service industries and occupations
whose authors would not consider themselves to be service researchers.
There is, for example, a less visible service literature that is
exploring issues connected with consumption rather than with service
relationships per se (Miller 1998 a,b; Miller et.al, 1998 73-99).
Both the previous reviews emphasized the wide diversity of research questions and topics being considered by researchers in different European countries. This diversity has not diminished. There are also important differences in the ways in which individual country reports are structured. These differences reflect diversity in the institutional structure supporting university research, for example the availability of funding, diversity in research funding institutions and in the appraisal and promotion policies applied to full-time research workers (Geuna, 1999). These factors are complicated by the impact of population size differences between European countries as well as the type and nature of service industries and occupations in each of these economies. It is not surprising that each of the country reports should be extremely different. Such diversity is an advantage as it encourages academic debate as well comparative analysis. This review is divided into three sections. The first section will briefly explore some of the key dimensions and implications of the process of internationalization. Second, key themes in the European service literature will be identified, and finally, apparent gaps in the European service research agenda will be identified. The final section is, of course, heavily influenced by my own current research wish list, but informed by reading my colleagues' reviews of the service literature.
The
Meaning of Internationalization
We live in an age of truisms: the
world is becoming smaller; the economy is now global; globalization is
associated with an escalation in the homogeneity of culture, economy
and even society; economic success can only be founded on global
success; knowledge matters, manufactured products rely increasingly on
knowledge, etc. Such truisms should encourage reflection on the meaning
of the term and process of internationalization. In what ways is
internationalization different to globalization?, or what, if anything,
is new or different about the current process of internationalization?
There is a rapidly growing literature on this topic (Amin, 1997; Hirst
and Thompson, 1996a), but none of the country reports explore the
manner in which internationalization should be conceptualized (but see
De Bandt, 1991). Maybe the time for such a task is past, but it is
still important to recognize that internationalization is a very
different process to globalization. Internationalization involves
economic activity that occurs between a limited number of countries
whilst globalization should theoretically involve interaction between
many different countries. There are, in fact, very few global companies
or products. It is also open to debate whether a global economy exists
given the partial and restricted spatiality of economic activity. Some
countries are still waiting to be included in the global economic
system, and inclusion may be associated with a whole series of
negatives - environmental degradation, the destruction or dilution of
local cultures and the introduction or development of new social
inequalities. The absence of a conceptual literature on
internationalization in the country reports may reflect the perceptions
held by the authors or that such a debate is occurring as part of a
wider debate in economics or economic geography. It is also partially
true, if somewhat controversial, to argue that service researchers have
explored internationalization from the perspective of their own
economies without paying too much attention to wider issues surrounding
the on-going process of the internationalization of economic activity.
Finally, there is a new way of thinking about the relationship between services and internationalization that is being developed by Daniels (2000). He argues that services, especially producer services, play an important role in supporting the export of products as well as being exported in their own right. Thus, the internationalization of certain services may be less important than the role they play in supporting the export of manufactured products. Daniels' argument is supported by the recent work of Leo and Philippe (1999a) into the relationship between services and the export of products. This major survey of 8500 French companies found that services are added to products to obtain a competitive advantage. Theme
1 : The Service Gap Hypothesis
Both the German and Slovenia
country reports highlight a preoccupation with the 'service gap'
hypothesis or the assumption that there are different models of
industrial development. Germany has been concerned for some time that
its service sector lags behind the Anglo-American economies (Haisken-De
New et.al. 1998). Slovenia has been working on a strategy document that
identifies the medium-term economic and social policies required to
complete the economic transformation of the country and to prepare its
economy for accession to the European Union (Erjavec et.al., 1998). The
important point about this literature is that it is based on an
international comparison between countries with different and
distinctive economic histories. There is no one route to economic
development. Not all countries should have the same proportion of the
employed population in service employment. Each culture and economy
should have the proportions that best support that country's ways of
production and consumption.
The literature on the German service gap, however, is intriguing in that a study by Cornetz and Schäfer (1998 a & b) supports the service gap hypothesis. A careful comparison of occupational data from CPS (current population survey) in the US and the socio-economic panel (SOEP) in Germany reveals that in the US in the mid-1990s, over 80% of the workforce were in service jobs, whereas the quota for Germany was around 75%. Taking labour participation rates into consideration, the gap widens enormously. There were 310 service jobs per 1000 inhabitants in Germany as compared to 418 service jobs (per 1000 inhabitants) in the US (Cornetz and Schäfer, 1998 a & b). The wage distribution is wider in the US than in most European countries including Germany. Contrary to a widely shared assumption, it is not low paid "Mac-jobs" which account for the markedly different employment share in services between the USA and Germany. The difference is accounted for by a far higher proportion of (mostly well-paid) producer service jobs: 183 in the US versus 100 in Germany respectively work in producer services per 1000 inhabitants. In particular, Cornetz and Schäfer hold that there is a lower share of managers in Germany and not so many engineers, scientists or other business (service) occupations. The service gap debate is complicated by research that is investigating differences in outsourcing policies between Germany and the USA. Services contribute 40% of the total value added in the German economy and 65% of the American economy. This difference is explained by a reluctance of German manufacturing companies to outsource service functions (Beyer et.al, 1998). This literature can be usefully combined with that of Carrier and Miller's (1998) thought provoking edited collection on virtualism. They have a number of important messages to make of which the most interesting is a trenchant critique of economic modeling and its relationship with structural adjustment imposed by for example the EU or World Bank. The point is that such structural adjustment relies on abstract modeling procedures which have less to do with the real world than with the internal expectations and career trajectories of academic economists. Miller (1998c: 198) cogently notes that 'economics is actually an abstract modeling procedure, little affected by evidence' and that '. . . the reduction of structural adjustment to an attempt to force all states into greater conformity with this [theoretical] model, is a consequence'. The service gap or Slovenia's process of economic transformation may be more about virtual rather than 'real' economics. Comparative work, however, needs to be undertaken into the ways in which American, British, Japanese and German companies develop, manufacture and sell products. It is only through this type of linked comparative research program that the debate on the service gap hypothesis will be reconciled. Theme
2 : Marketing and Advertising
Common to all of the country
reports are media and academic publications in the area of marketing
and advertising. The Spanish report notes that international marketing
is acquiring characteristics that differentiate it from general
marketing (Fernandez Fernandez and Rubalcaba Bermejo 1998; Otero Simon,
1998). International marketing either involves the activities of
companies attempting to expand the export market for their products or
market research and marketing activity to assist firms that are
actively expanding overseas. Work from Norway has explored the
development of international marketing strategies for small and
medium-sized enterprises (SMEs) as well as examined the relationships
between companies and customers (Biong, 1998). This second piece of
research is especially interesting as it highlights the importance of
learning in this relationship. The Slovenian report identifies research
into new ways of marketing banking services (Jauk, 1998) as well as
noting that reengineering is being introduced into the banking sector.
This second point requires further research, as it is an indication of
the increasing internationalization of management ideas. British banks
are increasingly acquiring ideas and bank management models from the
USA and it appears that Slovenian banks have acquired access to a form
of the American management technique of business process reengineering
(Bryson, 2000).
The main problem with the service marketing literature is that much of it involves an extension or refinement of existing national marketing strategies. There appears to be important omissions in this literature. For example, are products marketed in different ways in different countries? Are there differences in the structure of the advertising industry between European countries? What marketing strategies do international companies adopt when they attempt to develop international products? What differences are there between the international marketing of services as against that of products? This last issue is being partially addressed in Denmark through Jan Mattsson's (1998) research into international marketing and exports of services drawing upon case studies of firms in Australia and New Zealand. Theme
3 : Telecommunications and E-commerce
Internationalization has always
been associated with developments in telecommunications. All country
reports refer to research on telecommunications and especially
e-commerce. Danish research is investigating the export of intangible
information-intensive services, especially, data services, financial
services and consultancy (Henten, 1998; Henten & Skouby 1998a, b
& c). The focus of this research is on information-intensive
services that are transportable and intangible. These may be divided
into three types: data services (e.g. database management, etc.);
in-formation services (e.g. financial services); and
knowledge-intensive services (e.g. consulting services). The first two
types may be delivered to-tally electronically, while the latter still
requires a combination of electronic delivery, face-to-face contacts or
body shopping. This research has explored the impact of technology on
the inter- and intra-firm division of labour. A geographical or
international division of labour will only occur when it is
technologically possible, but there must also be economic benefits and
cultural barriers (language, trust, reputation) have to be overcome. In
a high-wage country like Denmark, the debate has explored competition
from low-wage economies. It must be noted, however, that many services
cannot be exported as they still have to be located adjacent to their
customers.
There are many well-known examples of the minimization of labour costs via the international division of informa-tion service labour: for example American insurance companies undertake data entry functions in Ireland and European and American firms locate software production in India. In such cases, the political and cultural barriers are relatively unimportant. Formerly dispersed service functions may be centralized, as is the case of the expert centres or in-house universities of multinational consulting firms. Local consultants obtain expertise from such centres through Intranets or via an expert joining forces in the field with a local consultant. The development of the Internet and Intranet offers opportunities for the development of complicated new international divisions of labour, some of which directly involve the movement of people and others the transfer of information and expertise remotely. Italian research is exploring some of these issues especially in relation to Intranet technologies that support flexible work and new organizational forms (Genco and Maraschini, 1998). The development of e-commerce is explored in each of the country reports. The French report explores research on electronic exchange between producers, clients and intermediate firms in the retail sector (Monnoyer, 1999). This research identifies two types of web site on the basis of service interaction analysis. The German report identifies research that explores the economic and social consequences of the development of the Internet (Hinner, 1998; Rötzer, 1998). This research is also exploring the consequences of the Internet for urban and regional change. The Internet offers possibilities for changing the relationships between citizens and the state. However, to-date tele-work, tele-shopping and tele-banking have had limited success. Research has also been undertaken into the development of the German multimedia industry that includes software, computer service, internet services, internet providers, network providers, telecommunications companies and the media. Belzer and Michel (1998) estimate that between 6 and 8 per cent of the workforce (35,000 people) in the Dusseldorf conurbations are employed in multimedia firms. Companies are diversifying into the provision of information technology and services. Key factors in the development of this industry in Dusseldorf are the proximity of clients, availability of staff and accessibility. These factors have produced a multimedia agglomeration that appears to be similar to that which is developing in London (Nachum and Keeble, 1999). The Italian report identifies literature that explores the relationship between new forms of information technology (call centres, teleservices, etc.) and the physical structure of cities (Bolognini, 1998). The built environment of the city changes slowly in response to technological change but there is also considerable inertia due to the historic accumulation of capital investment. The Italian work suggests that the digital city does not have a physical presence as physical space may be replaced or challenged by connections and electronic linkages. There are important theoretical issues to consider in relation to e-commerce and internationalization. The Internet appears to be a global network, but there are places/spaces that are poorly connected to this technology as well as significant language barriers and maybe cultural barriers. The technology, the design of web sites, the availability of shopping via the web and search engines all suffer from design and technological limitations. Only some internet companies will become profitable enterprises, and these will be those companies which established their sites first, for example Amazon, the Internet bookshop, may be losing money, but it is one of the most visible, and potentially profitable web brands. Theme
4 : Foreign Direct Investment
The service relationship
restricts the ability of companies to export services without engaging
in foreign direct investment and franchising. A German study explores
the internationalization of business services (computer services,
consultancy, accounting, advertising, technical services) by comparing
the export behaviour of selected Swiss, American and Austrian business
service firms (Behofsics, 1998). For Switzerland and Austria the export
of services is a precondition for internationalization that is rapidly
followed by foreign direct investment (FDI). Other forms of FDI
engagement were also identified, for example licensing agreements and
franchising. The extent of FDI is proportional to firm size, but
Austrian SMEs have expanded their exports though supplying Eastern
European countries with business services. FDI is an extremely
important aspect of service internationalization given the requirement
for client/service supplier proximity. 'Follow-the-client' behavior is
still one of the most important incentives driving the export
strategies of service companies. Another interesting dimension of
Behofsics' study is that it draws attention to the idiosyncratic
histories of individual business service firms. Thus, the case studies
reveal that each company has its own history of internationalization
through different combinations of exports, clients and FDI (see also
the work of Leo and Philippe on the Haute Garonne, 1999b).
The Spanish report identifies other types of export behavior including exports, franchise agreements and types of co-operation or strategic alliances between companies (Palazzuelos, 1998). Franchising appears to be a good vehicle for the transmission of cultural and consumption patterns between countries. The example of McDonalds and the impact it has had on food styles and consumption behavior in urban areas should be noted, but there are less visible, but equally as important forms of export of lifestyle consumption products, for example the spread of management ideas from America to Europe (Bryson, 2000). The internationalisation of services is also being achieved through multilateral negotiations. The General Agreement of Trade in Services (GATS) has established a framework that is gradually leading to the liberalization of service trade. Very few of the country reports mentioned research into the GATS, but this might be because of the timing of the latest GATS round in November 1999 (but see Ciabrini, 1996, Europäische Kommission, 1998). Theme
5 : Producer Services and Consultancy
Producer services and
knowledge-intensive business services (KIBS) still dominate the service
research agenda at both the local and international level. There are
number of important reasons why this is the case. First, they play an
important role in supporting the design, development and export of
commodities (Paiola, 1998). Secondly, they are still creating new jobs.
Third, producer service companies and occupations are very visible as
they play an important role in manufacturing production.
The United Kingdom's report explores the regional impacts of the growth in the tradability of consultancy expertise (O'Farrell et.al, 1996). Small consultancy companies have begun to establish branch offices overseas and a high proportion are entering formal collaborative arrangements with other consultancies. The Government of the United Knigdom has been concerned for some time over the relationship between SME success and access to external business service expertise. Bryson and Daniels (1998) explore the use by SMEs of a range of producer services as well as evaluate the operation of the UK's policy to establish a one-stop-shop for business information in the United Kingdom. To assess trends in producer services growth, the Centre for European Economic Re-search ZEW (Mannheim) undertakes a quarterly panel survey of producer service firms. Approximately 4000 firms are interviewed about their economic situation, recent changes as well as their perspecti-ves on the future. In 1998, Germany's producer service sector experienced a minor slow-down in its growth rate (Kaiser and Buscher, 1998). It has become evident that producer services' growth depends on growth in the whole of the German economy. The problems of the East German economy are causing difficulties for the German economy. In general, computer services and consultancy fare better than technical services and waste management. In addition to the panel survey, the ZEW has recently developed a busi-ness cycle indicator, called the "service sentiment indicator", based on figures for value added in producer services and on the results of the panel (Kaiser and Buscher, 1998). The Italian report examines some recent research on financial services. This identifies a shift in bank culture - from a conservative and not particularly profit or cost conscious approach to a marketing-orientated approach (Giustiniani and Rossi, 1998). This change may reflect the growing trend towards bank mergers as well as the acquisition of banking systems from America. It would be interesting to discover the sources of innovation driving changes in the Italian banking system. The Italian banks are diversifying in an attempt to respond to an intensification in competition. Deregulation, intensifying competition and developments in technology have allowed new competitors in the form of non-bank financial institutions and retailers to enter the retail banking market. These factors have also stimulated banks to reduce their cost/income ratios and to allocate more efficiently their own internal capital resources. Retail banks began targeting specific customer groups and differentiating their products in order to meet the demands of various customer segments: for example they developed "bancassurance" strategies in which retail banks and insurance companies joined together in order to provide customer with a full range of financial services (Treu, 1998). Conclusion
and a proposed agenda for pan-European service research
Like the previous reviews, this
year's survey identifies important differences between the service
research agendas of the countries that supplied annual reports. These
differences reflect a combination of a number of factors: the
interest(s) of the author(s), the institutional structure of the higher
education sector, the size of the country, cultural differences and
economic differences. An important factor is the academic literatures
which individual countries are drawing upon.
There appears to be a number of important gaps in the service literature that urgently needs to be addressed. First, the literature on internationalization in Anglo-American economic geography began with a number of major studies of the rise and function of transnational, multinational and/or global manufacturing companies. There is a service literature on this topic, but it is rather general and it tends to be influenced by manufacturing research. An opportunity exists for a pan-European research project that would explore the operation and activities of a number of the larger service companies/conglomerates. Some of the key questions that need to be addressed are the differences between manufacturing and service internationalization strategies, and at a European level the identification of differences between the internationalization strategies of companies located in different member states of the European Union. Secondly, and most importantly there is an absence of truly comparative pan-European service research. This absence must be noted by RESER, service researchers and the policy-making community. RESER provides one mechanism for developing a pan-European service research agenda. European researchers need to be more proactive in attempting to establish pan-European research. The absence of comparative research is explained by the obvious difficulties of undertaking this type of research. The main problems are related to language and literature. Such differences mean that truly pan-European research is extremely difficult and will be complicated by the fact that academics from each European country have their own research agendas. It may be impossible to develop a common research agenda across Europe given the different economic histories, cultures, societies and political systems. Language problems can be partially overcome, but the real problem is identifying a research agenda that fits with the needs and interests of academics and countries from each member country of the European Union. The British service literature draws upon journal articles and books predominantly written in the UK and the USA. Comparatively few works from other European countries are cited. This is not, however, a British problem. Each country reads and relates to the academic debates developing in their own literatures. The RESER annual conference and this literature review highlights the in-ward country focus of much academic research. The 1997 report even went as far as suggesting that 'in a way . . . there is no Europe-wide research into service activities' (May and Bonamy, 1998). This has not changed and will not change until institutional frameworks are established to encourage and promote comparative European research. The European Commission should be addressing this issue, but even European funded research projects tend to consist of a series of individual linked research projects rather than truly comparative research. Research on service internationalization illustrates the inward looking perspective of academic research. Rather than exploring the process and impact of internationalization in general the majority of projects explored in this review identify and evaluate the impact of internationalization on their own country. The result is that each country explores questions that have already been addressed by academics in other countries and every country engages in a continual process of reinventing what are already partially created wheels. There needs to be more dialogue between academics across Europe, more debate and the identification by European research councils of common pan-European research initiatives and agendas. This does not imply that pan-European research should be avoided. The identification of differences between countries should provide valuable insights into the evolving relationships between culture, economy, society and space. Bibliography
• Amin, A. (1997) 'Placing
Globalisation', Theory, Culture and Society, 14, 2: 123-137.
• Behofsics, Josef (1998) Globalisierungstendenzen intermediärer Dienstleistungen, Wiesbaden: Deut-scher Universitäts-Verlag. • Belzer, Volker und Lutz P. Michel (1998) Der Multimedia-Standort Düsseldorf. Stuttgart: Akademie für Technikfolgenabschätzung in Baden-Württemberg, 1998. (Arbeitsberichte der Aka-demie für Technologieabschätzung in Baden-Württemberg). • Beyer, Lothar, Josef Hilbert und Brigitte Micheel (1998) 'Le Grand Espoir en Fin de Siècle. Entwicklungstrends und Gestaltungsperspektiven im Dienstleistungssektor' in: Cornetz, Wolfgang (Hrsg.): Chancen durch Dienstleistungen. Ansatzpunkte einer aktiven Gestal-tung struktureller Prozesse. Wiesbaden: Deutscher Universitätsverlag und Wiesbaden: Gabler: 77-101. • Biong, H. (1998) Læring i organisasjoner og betydning for relasjonsmarkedsføring (Learning in organisations and importance in relational marketing) Sandvika. NiM's Working Papers No 2. • Bolognini M, (1998) Telecomunicazioni digitali e città: futuro remoto anzi prossimo', Impresa & Stato. Rivista della Camera di Commercio di Milano, 47CCIAA, Milano. • Bonamy, J. and Daniels, P. (1997) The RESER Annual Progress Report on Services Research: a first synthesis, presented at the 7th Annual RESER conference, Roskilde University, Denmark. • Bryson, J.R. (2000) 'Spreading the Message: Management Consultants and the Shaping of Economic Geographies in Time and Space', in Bryson, J.R., Daniels, P.W., Henry, N. and Pollard, J. (eds) Knowledge Space, Economy, Routledge, London. • Bryson, J.R. and Daniels, P.W. (1998) 'Business Link, strong ties and the walls of silence: small and medium-sized enterprises and external business service expertise', Environment and Planning C: Government and Policy, 16: 265-280. • Bryson, J.R., Henry, N., Keeble, D. and Martin, R. (Eds) (1999) The Economic Geography Reader: Producing and Consuming Global Capitalism, John Wiley, Chichester. • Carrier, J.G. and Miller, D. (Eds) (1998) Virtualism: A new political economy, Berg, : Oxford. Ciabrini, S. (1996) Les services dans le commerce international, Presses universitaires de France, Que sais-je. • Cornetz, Wolfgang und Holger Schäfer (1998) 'Dienstleistungsdefizit in der Bundesrepublik Deutschland?' in Cornetz, Wolfgang (Hrsg.): Chancen durch Dienstleistungen. Ansatz-punkte einer aktiven Gestaltung struktureller Prozesse. Wiesbaden: Deutscher Universi-tätsverlag und Wiesbaden: Gabler, S. 37-73. • Cornetz, Wolfgang und Holger Schäfer (1998) 'Hat Deutschland den Dienstleistungsrückstand ge-genüber den USA aufgeholt?', in: Wirtschaftsdienst, 78, 7: 418-425. • Daniels, P.W. (2000) 'Export of services or servicing exports? Geografiska Annaler, Series B: Human Geography, in press • de Bandt Jacques, 1991, Compétitivité et échanges internationaux dans une économie de service, Revue d'économie industrielle, 55: 108-117. • Erjavec E., Kajzer, A. ,Lavrac I, Mrak M., Radej B., Rojec M., Stare M., Strmsnik I., Vendramin, M. (1998) Strategy of the Republic of Slovenia for Accession to the European Union-Economic and Social Part, Institute of Macroeconomic Analysis and Development, Slovenia, 278p. • Europäische Kommission (Hrsg.) (1998) GATS 2000: Öffnung der Dienstleistungsmärkte; das All-gemeineÜbereinkommen über den Handel mit Dienstleistungen. Luxemburg, Amt für Amtliche Veröffentlichungen der Europäischen Gemeinschaften. • Fernandez Fernandez, M. T., Rubalcaba Bermejo, L. (1998): "The role of foreign and national advertising firms in the activity of manufacturing and service enterprises" presented to the VIII Congreso Anual de RESER (Berlín, 8-10 October). • Genco P., Maraschini F., (1998) L'ingegneria impiantistica, Il Mulino, Bologna. • Geuna, A. (1999) The Economic of Knowledge Production: Funding and the Structure of University Research, Edward Elgar, Cheltenham.
Wednesday April 21, 2004
RESER
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RESER SMALL RESEARCH GRANT 2012
2011-10-12
RESER PhD Mobility Grant
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6th annual Summer School in Services SEM2011
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After Hamburg
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RESER survey 2004, I.C.T. and Service relationship in the global economy
