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Rapport Anglais 2001R 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
Introduction
New information and communication technologies (NICTs) have brought tremendous changes to the development of services in Britain over the last twenty years. This report covers research undertaken in the United Kingdom on this topic over the last five years, 1996 to 2001. Seven themes and questions can be identified that flow through the United KingdomÌs literature on this subject: - Are NICTs the driving forces for changes in the way services are provided? - How have NICTs changed the development of services? - Who are the users of NICTs? - Where do NICTs concentrate? - To what extent have services been oriented to the utilisation of NICTs? - What impact have NICTs had on services? - Others Theme 1 Are NICTs the driving forces for changes in the way services are provided ? Gardener et al (1999) examines the modern evolution of retail banking in a European setting and with a particular emphasis on the UK. They find that regulation, competition and information technology developments are important drivers of change in most European retail banking systems. Howells (1996) has a slightly different view. He examines the relationship between technology and globalisation in a case study of the European payments system. He argues that technology itself is not the driving force of globalisation. Other forces including national banking industry structures, regulatory regimes, retail industry structures and cultural factors have a role to play. Bagchi-Sen and Kuechler (2000) investigate the strategic and functional orientation of small and medium-sized enterprises in professional services. Unlike the previous two studies by Gardener et al (1999) and Howells (1996), Bagchi-Sen and Kuechler (2000) draw the opposite conclusion. They find that traditional face-to-face interaction with clients continues to be the preferred mode of service delivery despite the increased introduction of information technology (IT) and local area networks by the proactive, functionally diversified or internationally oriented firms.
Theme 2 How have NICTs changed the development of services? Cameron (1998) and Watson et al (1996) focus on how NICTs have changed the development of services. Cameron (1998) describes the general trends and changes that are occurring in services as a consequence of the adoption of NICTs. Cameron argues that the defining feature of economic growth in the information age is the increasing weightlessness of output. Production and consumption is increasingly no longer about objects but about information and services. Watson et al (1996) focus on delivering service. They argue that the Web is the ultimate weapon for delivering services because it takes the human element out of services thereby eliminating variability and enables customisation. This enables IT to create and deliver the precise services that the customer desire. They also predict that the main outcome of the information age will be radically improved services.
Theme 3 Who are the users of NICTs?Thelwall M, paper (2000) reports on a survey of 221 Web sites chosen at random from a subset of the .co.uk area of the Internet. The survey shows that computing companies continue to have a sizeable presence on the Web, while certain other types of business now also have a relatively large number of sites. The results are consistent with general business use of the Web in the UK still being in an experimental phase of Web site creation Îby those who can rather than by those who shouldÌ make use of the Web as a business tool.
Theme 4 Where do NICTs concentrate?Cantwell (2000) and Dodge and Kitchin (2000) deal with the geography of NICTs in the UK and in the world respectively. CantwellÌs paper (2000) explores the location of innovative activities in multinational corporations (MNCs). The results of this paper indicate that the pattern of MNC networks for innovation conforms to a hierarchy of regional centres, and that the pattern of technological specialization of foreign-owned affiliates in different regional locations depends upon the position of the region in the locational hierarchy. The book by Dodge and Kitchin (2000) provides a geographical analysis of the multiple facets of cyberspace and its relationship to social, cultural, political and economic life. They argue that geography continues to matter, despite recent rhetoric claiming the 'death of distance'.
Theme 5 To what extent have services been oriented to the utilisation of NICTs? Research by Greaves et al (1999), Fletcher and Wright (1996) and Colgate (2000) shows the extent to which the UKÌs service industries have been oriented to the utilisation of NICTs. The paper by Greaves et al (1999) continues research by Cockburn and Wilson (1996) and Ng, Pan and Wilson (1998). It finds that over half of all the Web sites surveyed are used to give information about company products and services and about 40 per cent of companies are selling their products and services through their Web sites. Fletcher and WrightÌs paper (1996) suggests that there is a good degree of integration between marketing and IT groupings within the strategic planning process. A high degree of strategic ambiguity, however, and an absence of a strategic time frame for decisions making process is documented. It is concluded that, within the UK financial services industry in general, a strategic vision does not seem to exist that enables the majority of firms adopting IT innovations to develop marketing tools that would enable then to gain sustainable strategic advantage. ColgateÌs study (2000) also shows that the application of IT to support marketing in the retail banking industries in Australia, New Zealand, UK and Ireland is still at a low level of sophistication.
Theme 6 What impact have NICTs had on services? British research on the impact that NICTs have had on services can be classified into two categories: impact at the macro level and at the micro level. At a macro level, studies by Channon (1998), Archibugi and Michie (1997), Corly (1997) and Baruch Y (2001) are worth mentioning. Channon (1998) evaluates the strategic impact of IT on the retail financial services industry in Britain. He finds that under the influence of NICTs, traditionally separate industry sectors such as banking, insurance, housing finance and brokerage have become increasingly integrated since the late 1980s. Archibugi and Michie (1997) challenge the statement that the internet, the explosion of globalised financial markets and increased foreign direct investment by transnational corporations are creating a global market in which the nation state is little more than an anachronism. They argue that with a global market, any competitive advantage will bring larger rewards. So government action to enhance firms' competitive advantage becomes more important. NICTs are not, therefore, breaking down borders. The book, The Weightless World: Strategies for Managing the Digital Economy (Coyle, 1997) is a serious examination of the multifarious effects of the digitalisation of the economy. On the one hand, Coyle admits that the knowledge economy has brought benefits to the progress of the economy. On the other hand, she pays more attention to the side effects exerted by the growth of information technology. She argues that digital technology and global business have turned the world upside down. They have accelerated problems such as economic inequity and unemployment. Baruch (2001) also points out that NICTs have forced individuals, organisations and society to be become more ÎautisticÌ. At a micro level, British scholars have paid more attention to the problems raised during the process of the introduction of NICTs. Clegg et al (1997), Holland et al (1998) and HarrisÌs (2001) reports concentrate on the productivity of services in the UK. The finding by Clegg et al (1997) indicates that 80 to 90 per cent of IT investments do not meet their performance objectives. Holland et al (1998) find that the profitability of banks world-wide has decreased from the early 1980s to the 1990s. This paper argues that the broad competitive forces of information technology, globalisation and deregulation are destabilising the banking industry leading to irrevocable changes which allow new entrants, disintermediation, innovation and customer changes on a much greater scale than has occurred in the past. Harris (2001) also reports that massive investments by British retail banks in information technology are not being translated into significant productivity gains in the UK. Another problem discussed by British researchers is information asymmetry. The paper by Xiao et al (1998) suggests that information asymmetry has been aggravated and IT use has played a role in this exacerbation. Leyshon et al (1998) also find that the perennial problem that faces all providers and consumers of financial services is information asymmetry due to the increasing utilisation of NICTs. Information asymmetry has served to create social and spatial divisions of financial inclusion and exclusion.
Theme 7 Others Hepbun, Eric D, 1998, ÎIT facilitated regulation on London's financial markets - A case studyÌ, International Journal of Project Management, Kidlington, Vol 16, Issue 1, pp.27-32 Levshon A and Thrift N, 1999, ÎLists come alive: electronic systems of knowledge and the rise of credit-scoring in retail bankingÌ, Economy and Soceity, Vol 28, Issue 3, pp.434-46 Willcocks, Leslie and Lester, Stephanie, 1996, ÎBeyond the IT productivity paradoxÌ, European Management Journal, London, Vol 14, Issue 3, pp.279-292 Another three papers are worth mentioning. The first one (Willcocks and Lester, 1996) introduces a new approach for evaluating the performance of IT: the integrated systems lifecycle approach. The other two articles are empirically based studies. Hepburn (1998) explores the process by which a major information technology system was designed and introduced to monitor LondonÌs financial markets. Leyshon and Thrift (1999) introduce and evaluate the credit-scoring systems used by retail banking. These are used to overcome the chronic problems of information asymmetries. menu Conclusion All the literature discussed in this short overview take the form of published journal articles and books. The seven themes identified cover a wide scope, ranging from whether NICTs are the driving forces for service changes, the how, who and where questions related to NICTs and services, to the impact that NICTs have brought to services. The literature and these themes show that NICTand its impact on services has become an important theme in service research in the United Kingdom. This is in line with the rapid introduction of NICTs into BritainÌs services. Two problems, one empirical and one theoretical, are also revealed by this survey. First, in terms of empirical studies, the majority of the British literature in this area is concerned with understanding isolated service sectors and service issues from different point of views. In particular, a large number of studies have concentrated on the UKÌs banking and financial sector. Other service sectors, such as telecommunications, insurance, entertainment etc. are simply overlooked. This can be partially explained by the dominance of London and its role as a major financial centre. Banking and the financial sector are some of the most important industries in the UK. Theoretically, the literature is underdeveloped with the main focus being on empirical studies. The only major theoretical paper is by Willcocks and Lester (1996) that develops an approach for examining the performance of IT. To summarise these two problems, to the best of my knowledge, there are hardly any comprehensive research projects or programmes underway in the United Kingdom that are exploring the relationship between NICTs and services. Therefore, this survey suggests that a comprehensive research programme needs to be developed in the United Kingdom whose focus is on theoretically informed empirical research into the relationship between NITCs and services in the UK.
BIBLIOGRAPHY Archibugi D, Michie J, 1997, ÎTechnological globalisation or national systems of innovation?Ì Futures, Vol 29, Issue 2, pp.121-137 Bagchi-Sen, Sharmistha and Kuechler, Linda, 2000, ÎStrategic and functional orientation of small and medium sized enterprises in professional services: an analysis of public accountancyÌ, The Service Industries Journal, London, Vol 20, Issue 3, pp.117-146 Baruch Y, 2001, ÎThe autistic societyÌ, Information & Management, Vol 38, Issue 3, pp.129-136 Cameron, Gavin, 1998, ÎEconomic growth in the information age: from physical capital to weightless economyÌ, Journal of International Affairs, New York, Vol 51, Issu2, pp.447-471 Cantwell J, Iammarino S, 2000, ÎMultinational corporations and the location of technological innovation in the UK regionsÌ, Regional Studies, Vol 34, Issue 4, pp.317-332 Channon DF, 1998, ÎThe strategic impact of IT on the retail financial services industryÌ, Journal of Strategic Information Systems, Vol 7, Issue 3, pp.183-197 Clegg C, Axtell C, Damodaran L, Farbey B, Hull R, LloydJones R, Nicholls J, Sell R, Tomlinson C, 1997, ÎInformation technology: a study of performance and the role of human and organizational factorsÌ, Ergonomics, Vol 40, Issue 9, pp.851- 871 Colgate, Mark, 2000, ÎMarketing and marketing information system sophistication in retailing bankingÌ, The Service Industries Journal, London, Vol 20, Issue 1, pp.139-152 Coyle, Diane, 1997, The Weightless World: Strategies for Managing the Digita Economy, Capstone: Oxford Dodge, Martin and Kitchin, Rob,, 2000, Mapping Cyberspace, Routledge Fletcher, Keith and Wright, George, 1996, ÎThe strategic context for information system use: an empirical study of the financial services industryÌ, International Journal of Information Management, Guildford, Vol 16, Issue 2, pp.119-122 Gardener E, Howcroft B and Williams J, 1999, ÎThe new retail banking revolutionÌ, Service Industries Journal, Vol 19, Issue 2, pp.83-100 Greaves, C., Kipling, P. and Wilson, T D, 1999, ÎBusiness use of the World Wide Web, with particular reference to UK companiesÌ, International Journal of Information Management, Kidlington, Vol 19, Issue 6, pp.449-470 Harris L, 2001, ÎThe IT productivity paradox - evidence from the UK retail banking industryÌ, New Technology Work and Employment, Vol 16, Issue 1, pp.35-48 Hepbun, Eric D, 1998, ÎIT facilitated regulation on London's financial markets - A case studyÌ, International Journal of Project Management, Kidlington, Vol 16, Issue 1, pp.27-32 Holland CP, Lockett AG and Blackman ID, 1998, ÎGlobal strategies to overcome the spiral of decline in universal bank marketsÌ, Journal of Strategic Information Systems, Vol 7,Issue3,pp.217-232 Howells J, 1996, ÎTechnology and globalisation: the European payments system as a case of non-globalisationÌ, Technology Analysis & Strategic Management, Vol 8, Issue 4, pp.455-466 Levshon A and Thrift N, 1999, ÎLists come alive: electronic systems of knowledge and the rise of credit-scoring in retail bankingÌ, Economy and Soceity, Vol 28, issue 3, pp.434-466 Leyshon A, Thrift N, Pratt J, 1998, ÎReading financial services: texts, consumers, and financial literacyÌ, Environment and Planning D-Society & Space, Vol 16, Issue 1, pp.29-55 Thelwall M, 2000, ÎWho is using the co.uk domain? Professional and media adoption of the WebÌ, International Journal of Information Management, Vol 20, Issue 6, pp.441-453 Watson RT, Pitt LF, Berthon PR, 1996, ÎService: The future of information technologyÌ, Data Base for Advances in Information Systems, Vol 27, Issue 4, pp.58-67 Willcocks, Leslie and Lester, Stephanie, 1996, ÎBeyond the IT productivity paradoxÌ European Management Journal, London, Vol 14, Issue 3, pp.279-292 Xiao Z, Powell PL, Dodgson JH, 1998, ÎThe impact of information technology on information asymmetryÌ, European Journal of Information Systems, Vol 7, Issue 2, pp.77-89 Thursday April 22, 2004
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