Research Institute Eriss

ERISS: What do we mean by Services?

A 'service' can be described simply as: all intangible effects that result from a client interaction that creates and captures value.

Services are ubiquitous in today's world. The sector ranges from established 'intangible' goods, such as health and education, to newer arrivals, such as modern communications and IT. Services are thought to be essential to increasing productivity and growth, and pivotal to the development of knowledge-based economies.

At face value, services are all about client-provider interactions. Behind the scenes, however, operational efficiency, the creation of value relationships, and technology-enabled processes are critical [University of Cambridge 2007]. The sector's growth is in part a response to the transformation of traditional manufacturing industries into services. Many modern services 'bundle' products and services, and the distinction between the two has blurred. Some argue that products should merely be seen as "vehicles for service delivery" [Araujo 2006].

A number of typical shared characteristics distinguish services from goods-producing sectors. These include a high intensity of knowledge and ICT, rapidly changing business processes, and unique financial, regulatory and investment structures [ASR 2008].

Service industries also cover a wide range of business types, from travel and recreation through to highly knowledge-intensive services, such as global communication networks and specialized financial services [PMSEIC 2008]. In general, knowledge-intensive services encompass both professional services (e.g. financial, legal), and science and technology-linked services (e.g. environmental, mining, health).

Knowledge-intensive and people-related services are particularly relevant to this report, as they are more conducive to research, and promote innovation and economic globalization.