Transcript Importance of Service Sector to the UK Economy

Government’s Role in Service Science
and Innovation in Services
Allan Mayo
BERR Services Policy Unit
22nd Service Conference and Workshop
7 November 2008
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Presentation will cover:
1.
Size and importance of services to the
economy
2.
Drivers of change
3.
Impact of the Public Sector
4.
Focus of business innovation
5.
Skills to promote service innovation and
business performance
2
Importance of Services Sector to the UK
Economy since 1945
3
Sector GVA as a proportion of UK economy in
2006
4
UK trade in services 1996-2006
5
UK services sector exports 1996-2006
Exports of Services 1996-2006
35
30
25
Other Business
Travel
Transport
Financial
Royalties and License Fee
Insurance
Government
Computer and Information
Communications
Personal,Cultural and Recreational
Construction
£bn
20
15
10
5
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Year
6
Exports of business services
Exports of UK business services 2996-2006
12
10
OBS
Consultancy
8
R&D
£bn
Engineering
6
Legal
Advertising
Surveying
4
Accounting
Architecture
2
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Year
7
UK/US productivity gap
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Coverage: a focus on five services
sectors
•
•
•
•
•
Retail
Logistics
Construction
Environmental services
Internet delivered content services
= 25% of UK output by GVA, reflect diversity of service sectors
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Methodology and coverage
Four questions examined:
•
Drivers of change
•
Way services sector innovation has changed and
how it might be measured
•
The barriers to innovation
•
The scope for effective government intervention
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What are the drivers of service sector innovation?
•
Increasing power of consumers
•
ICT is the key technological driver and enabler of
change.
•
Globalisation/competition
•
Sustainability
•
Impact of the public sector
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Increasing power of consumers
12
ICT is key technological driver
Drivers of innovation and growth in services
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ICT Innovation comes in waves
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Globalisation: Quarterly Trade in Services (current prices, not seasonally
adjusted)
45,000
40,000
35,000
30,000
£ million
Exports of services
25,000
20,000
Imports of services
15,000
10,000
Balance
5,000
0
1990 Q1
1992 Q1
1994 Q1
1996 Q1
1998 Q1
2000 Q1
2002 Q1
2004 Q1
2006 Q1
2008 Q1
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Sustainability
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Impact of the public sector
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Impact of the public sector
18
Impact of the public sector
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Impact of public sector
20
Impact of public sector
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Impact of the public sector
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Impact of the public sector
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Elements of service innovation
•
•
•
Capture and use information:
– anticipate customer needs
– market and competitor trends
– analyse own performance
Management, people skills
– respond to opportunities,
threats
– exceed customer expectations
Process
Offering
Delivery
Business
model
Quality framework:
– Standards
– Business planning, processes
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Management of change
•
Analysis suggests high level
management skills are not
widespread in UK business…
•
Action needed to strengthen
business engagement with
learning opportunities and
leading practice
•
Develop focus on
transformative application of
ICT to business processes; and
scope to promote this via a
network of expertise
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Business Challenges: Financial Times 2/09/08
•S Korea’s KDB confirms
talks with Lehman
Ferrovial
It rode the construction boom
at home and diversified abroad
- especially into the UK, with
airport operator BAA, and into
the Americas, with toll
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roads…..
Transforming Public Services
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Promoting learning in Government
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Improving public sector procurement
•
clear joint objectives
•
mutual understanding
•
developing ongoing relationship
•
appropriate risk sharing
•
opportunities for innovation
•
flexibility
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Service science is not enough
Commitment and capability require a framework of:
•
Ethics
•
Learning
•
Networks
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What should we aim to deliver?
•
UK succeeds as hub for high growth,
knowledge intensive services, attracting
the leading global players to locate here
•
UK closes productivity gap with US in
services
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Report URL:
http://www.berr.gov.uk/files/file47440.pdf
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BERR Services Policy Unit
[email protected]
[email protected]
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