Service Worlds

People, Organisations, Technologies

John Bryson, Peter Daniels, Barney Warf

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781135132002
• Topic: Sciences physiques
• Subtopic: Géographie

As the twenty-first century begins, significant changes are occurring in the way that services and goods are produced and consumed. One of the key drivers of this change is information and communications technology (ICT). It has transformed the role of space and time in patterns of economic development, in the rise of globalization and in the scale and structure of organizations. ICT has therefore accelerated the process of continual change and evolution that is the hallmark of both the capitalist economy and of organizations.

Giving a student-friendly account of the diversity of theoretical perspectives, this outstanding book aids understanding the evolving economic geography of advanced capitalist economies. A series of detailed firm and employees' case studies from Europe, North America and the Asia Pacific, are used to inform useful theoretical case studies, which also investigate the significance of increased blurring of the lines between services and manufacturing functions in the production and consumption process.

1 Service Worlds

Fundamentally, at the heart of every economy in the world is some form of production. The task for the student of economic geography lies in unravelling the processes and forces that produce the spatial forms that production creates. Ultimately, it is a very simple process that involves the articulation of land, labour and raw materials but as production develops, increasing complexity is introduced. This comes with the development of a division of labour that is rapidly transformed into a spatial division of labour whereby the production process is constantly subdivided into smaller activities that are distributed geographically as a complex networked mosaic of production functions that span the globe. Factories, warehouses, shops and offices are distributed across geographical space, but not randomly. They are structured by loose connections of people co-operating together in firms, or within sectors, or as loose networks trying to increase the value of the capital employed in the production process. In more simple terms, each individual is trying to generate enough money to support his/her lifestyle ambitions. The task of unravelling the working of capitalist industrial production is formidable because it operates as a complex web of formal and informal relationships that overlap, are constantly being reformed, are interconnected in many unknown ways, and that stretch across physical, political and cultural boundaries. This complexity is constantly in flux as production processes and their geography are also constantly changing, so ongoing change or evolution, rather than stability, is the norm.

The economy is a process that transforms raw materials into something that has a value. The products that are created can be intangible, for example a concert, or tangible, such as a Boeing 747. Production and products are constantly changing. Tangible changes may take the form of new raw materials, dimensions, or appearance but, and now becoming much more important, intangibles such as design ideas, aesthetics, ergonomics or user profiling are a vital part of the production process. Part of this transformation involves the production of a greater diversity of products, many of which are produced by information-rich production processes. It is important to remember that the economy is still dominated by the production of goods; without them the economy could not function and lifestyles as we know them would not be possible. Life and work under capitalism require cars, telephones, computers, houses, clothes, food, leisure facilities; in fact all the material objects and services required to maintain its reproduction and, of course, labour. The ongoing spatial division of labour has, however, meant the consumption of goods and, increasingly, services in many countries rely on actual physical production elsewhere — in China, India and in other low-cost countries. This means that some countries increasingly specialise in the production of services; activities that are sometimes considered only part of the supporting architecture of the production system (see Chapter 2). There is a notion that service functions are actually inessential or even parasitic activities. Such ideas miss the point; it is actually impossible for production to take place without services. But how do we define production? Does it only include manufacturing or the processes that are directly involved with the physical production of goods? If this is the case then perhaps there is a ‘(goods) Production World’ to be explored and understood. The difficulty is that this would only account for about one-fifth of employment in many economies. The world of production must now incorporate service functions that are interwoven in complex ways into the physical production of products.

The shift from ‘local’ to ‘global’

Equally important is that services are also supplied in their own right directly to end-consumers. A basic service such as hairdressing is just one of many that are provided locally. At the same time, as part of the internationalisation of the economy, some hairdressers have an international reputation. They are the preferred choice of the wealthy and the famous who travel to them, or the hairdressers have set up salons that are located in places that are visited easily or frequently by the wealthy. At another level, are Hochschild's global care chains (Ehrenreich and Hochschild, 2002; Hochschild, 2002) which make possible the lifestyles of wealthy individuals and households, especially in developed market economies. Global transfer is arranged of the services associated with the traditional role of the mother, wife or female partner — childcare, home making and sex. According to Ehrenreich and Hochschild nannies, maids and sex workers are brought to the ‘First World’ from the ‘Third’ to provide caring, emotional and sexual resources. Reliable statistics on the movement of legal and illegal migrants do not exist but it is estimated that half of the world's 120 million legal and illegal migrants are women. These developing global care chains are created because of the rise in female paid employment in the West and the need to find alternative carers — paid domestic workers and caretakers for children and the elderly. Women in poorer countries take part in this globalisation of care as over the last 30 years the rich countries have become richer while the poor countries have, in absolute and relative terms, become poorer. The wages of a Filipina domestic worker employed in Hong Kong are 15 times greater than the remuneration of a schoolteacher back in the Philippines (Constable, 2002). As a result, children become separated from their mothers and placed in the care of grandparents or other family members and may only see their parents every two or three years. The children of the wealthy in the First World are benefiting at the expense of children living in the Third World.

The migration of a highly educated skilled professional elite of knowledge workers from relatively less developed to developed countries is usually associated with a one-way flow. This certainly damages the short-term economic prospects of the less developed countries but may, over time, produce limited benefits as migrants return to their home country or there is a ‘second-generation effect’ that results in expatriates transferring money, technology and human capital back to their country of origin (Khadria, 1999). The other side of this ‘service’ brain drain is the parallel but less visible flow of female care workers that is splitting families apart. This is not a new process, but the scale and speed of development of these global care chains is unprecedented. The globalisation of care is not just about the wealthy; it is also implicated in the provision of private and public health care. The National Health Service (NHS) in the UK increasingly relies on the recruitment of nurses from less developed countries. In 2001–2002, 13,721 nurses and midwives originally trained and registered outside the UK were entered onto the UK Nursing Register; this equates to almost half of all new nurses registered in that year (Buchan, 2002a). Of these, 7,235 came from the Philippines, 2,114 from South Africa and 1,342 from Australia. A study often health authorities identified that between 4 per cent and 65 per cent of the total qualified nursing workforce were trained outside the UK (Buchan, 2002b). International recruitment of nursing staff is considered by some health authorities to be the most effective mechanism for coping with shortages of nursing staff in the UK. It is also much cheaper than training nurses in the UK; it costs between £2,500 and £4,000 to recruit a nurse (£1,000 to a recruitment agency and travel costs). There are major ethical problems with this global transfer of nurses in that NHS and American health care services are increasingly dependent on the availability of nurses trained by poorer countries that, themselves, can ill afford to lose this nursing expertise.

A ‘Production World’

These examples illustrate the way in which service activities are increasingly interwoven into the fabric of industrial production and consumption as well as into the reproduction of labour. It is possible to describe capitalism's industrial production as a ‘Production World’, a world in which individuals collaborate in temporary coalitions called firms and in which complex networks are used to produce products. Wrapped into and intertwined within this world of production are services (see Chapter 4).

The aim of this book is to develop a service-centred account of production, as a counterbalance to the manufacturing-centred accounts that dominate the established literature in economics and economic geography. Services are no longer worthy of ‘afterthought’ status. This is not to say that manufacturing, the physical production of products, should be understated, but that now the same argument is also true for services.

There are many different worlds of production — from Becker's Art Worlds to the Worlds of Production of Storper and Salais (1997). At issue is what the floodlight is set to illuminate; in this book it is aimed at illuminating some aspects of the world of services. The adjective ‘some’ is used deliberately because of the complexity of production and the impossibility of exploring all aspects of what we have termed ‘Service Worlds’.

One of the reviewers of the draft manuscript of this book expressed surprise that large multinational service firms did not occupy a more central role in our analysis. The comment highlights one of the common myths about the contemporary economy. The majority of businesses are actually small firms. For example, Storey (1997: 21) demonstrates that in 1991, micro-businesses (fewer than 9 employees) accounted for approximately 28 per cent of UK employment (or 1 in 3 of all jobs). Many of these were, and still are, small service firms. By comparison with manufacturing firms, service firms face very low barriers to entry. They do not require expensive production sites, massive capital expenditure on machines and investment in the construction of brand products. Many service firms can be set up by individuals with just a mobile phone, a photocopier and a laptop, assisted by some knowledge, expertise and, possibly, an already-established reputation. This is not to suggest that the book does indeed overlook the role of large firms, but rather to draw attention once again to the inherent diversity of the production system.

‘Service Worlds’?

So what do we mean by the term ‘Service Worlds’? The term is an attempt to highlight the importance of service activities as an integral part of the production process, tangible or intangible. We are suggesting that Service Worlds are complex, evolving, heterogeneous and long-established phenomena. They are as old as capitalism and have played a central role in its development. Service Worlds are not just about knowledge and information-rich activities performed by a highly paid elite workforce, but also include a growing cohort of poorly paid manual service workers who function as an essential support for those in well-paid work. A Service World is also one in which there is a direct, even dialectical, relationship between service production and consumption. They frequently take place simultaneously so that any attempt to isolate production from consumption or consumption from production becomes meaningless; it is too much of an over-simplification of the economic. This contradicts the consumption or material cultures ‘turn’ in the social sciences that increasingly isolates the consumption moment from its production moment. In the Service World the distinction between services and manufacturing is at best misleading and at the worst a fundamental distortion of the way in which the production system operates. It is a World in which large multinational firms, professional partnerships, small and medium-sized firms as well as sole practitioners are all integral to the production process. It is also a World that incorporates shop workers and care workers; in other words, the multitude of low-paid supporting service workers. At one level, the Service World is about the enhanced importance of knowledge in the production process, but this is only one of its most visible parts in that there are additional dimensions, such as the legal systems and institutional structures that are used to regulate and control the evolving production system. For example, the intellectual value of physical products is regulated and protected by industrial patents, but patents cannot protect most service knowledge; a new global legal architecture needs to be developed.

Service industries, occupations and activities

There can be no question that the developed market economies have experienced significant structural changes that have transformed their economies. Two related processes have been at work: structural change in the economy and alterations in the way individuals experience work. Broadly, these are readily identifiable transformations, but attempts to explain and theorise them have produced considerable confusion. Urry (1987: 5) argues that the literature that explores these structural changes suffers from a fundamental ambiguity concerning the very notion of ‘services’. This confusion is at the heart of the debate into the nature and extent of structural changes being experienced by developed market economies.

The word, service, is used in three distinct ways: service industries consist of enterprises in which the final commodity (service or product) is in some ways intangible or immaterial, and ‘which contains a labour force made up of both service and non-service occupations’ (Urry, 1987: 5); service occupations are forms of work that are not directly, but may be indirectly, involved in producing physical products; and service functions are the uses that customers/clients obtain from consuming the products of both service and non-service industries. Understanding structural change thus requires an awareness of the forces that are driving growth in the number of service enterprises and creating new forms of, what are essentially, service occupations.

Fundamental to understanding these changes are the processes and pressures that are encouraging consumers (both final and intermediate — private, public and not-for-profit enterprises) to acquire more service products. There are different drivers at work. Individuals are consuming more services because physical commodities become more complicated while work has become a dominant feature of lifestyles that are increasingly time-poor. Consequently, increasing expenditures have become necessary on services to replace activities that individuals or households previously undertook for themselves. In addition, completely new services are developed which customers are also encouraged to consume. Conversely, enterprises are constantly reconfiguring the production process, as well as the design and utility, of products. Working in tandem, these two processes result in an increased need for service functions that are embedded in production and increasingly embedded into products, for example products that can only fulfil a purpose when the appropriate software has been installed.

‘Old’ Service Worlds

The traditional perspective on services, derived from post-industrial perspectives (see Chapter 2), focused upon services as information processing activities, including clerical activity, executive decision making, telecommunications, and the media (Hall and Preston, 1988). Information processing was heralded as a qualitatively new form of economic activity. Services were seen as representing an historically new form of capitalism. Unfortunately, this view was mistaken: while many service jobs do involve the collection, processing and transmission of large quantities of data, clearly others do not: the rubbish collector, restaurant chef, security guard and janitor all work in the service sector, but the degree to which these activities centre around ‘information processing’ is minimal.

More recent theorisations stress services as another form of capitalist commodity production, involving the same constraints to location, production and consumption as other industries (i.e. manufacturing). In this light, services may be seen not as a qualitatively new phenomenon but as an extension of market relations into new domains of output and activity. Such a view does not exclude the possibility that services may indeed possess an ‘inner logic’ somewhat different from that exhibited by manufacturing; however, it stresses the embeddedness of services within th...

Table of contents

• Cover
• Half Title
• Full Title
• Copyright
• Contents
• Acknowledgements
• Chapter 1 Service Worlds
• Chapter 2 Changing perspectives on the service economy
• Chapter 3 From networks to new forms of regulation
• Chapter 4 Service knowledge and the production process
• Chapter 5 The rise and role of producer services
• Chapter 6 Service work
• Chapter 7 Information and communications technology and services: opportunities and impacts
• Chapter 8 Consuming services: circuits of knowledge, stages and performances
• Chapter 9 Service spaces
• Chapter 10 Services and globalisation
• Chapter 11 Global services: from trade to foreign direct investment
• Chapter 12 Service Worlds revisited
• Bibliography
• Index