Transcript Importance of Service Sector to the UK Economy

Improving the Framework for Service
Innovation and Performance
A Government Perspective
By Allan Mayo
17 September 2008
1
Presentation will cover:
1.
Size and importance of services to the
economy
2.
Drivers of change
3.
Focus of business innovation
4.
Barriers to innovation
5.
Skills to promote 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
G7 levels of service sector exports
by country
World Services Exports by Selected Country
450000
400000
350000
300000
US
MUSD
UK
250000
Fra
Ger
200000
Jap
150000
100000
50000
0
2000
2001
2002
2003
2004
2005
2006
Year
8
Value of Selected Regional Exports of Services
2005
9
UK/US productivity gap
10
Methodology and coverage
Sectors chosen:
•
Retail
•
Logistics
•
Construction
•
Environmental services
•
Digital Content Services
11
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
12
What are drivers of service sector innovation?
•
Increasing power of consumers
•
Impact of the public sector
•
ICT is the key technological driver and enabler of
change.
•
Globalisation/competition
•
Sustainability
13
Increasing power of consumers
14
Impact of the public sector
15
Impact of the public sector
16
Impact of the public sector
17
Impact of public sector
18
Impact of public sector
19
Impact of the public sector
20
Impact of the public sector
21
ICT is key technological driver
Drivers of innovation and growth in services
22
ICT is key technological driver
23
Globalisation of markets affecting prices
of commodities
24
Sustainability
25
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
26
Potential barriers to innovation in services:
•
transparency and openness of markets
•
coordination and communication of government
interventions
•
awarenesss of new developments, improving
uptake of technology, and promoting a culture of
change in management capabilities
•
trust in the internet as a platform for business
•
access to finance for growing innovative
businesses
27
ICT: use of software in business processes is
limited
28
ICT: use of software in business processes is
limited
29
ICT investment
30
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
31
Improving public sector procurement
•
clear joint objectives
•
mutual understanding
•
developing ongoing relationship
•
appropriate risk sharing
•
opportunities for innovation
•
flexibility
32
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
33
roads…..
Service science is not enough
Commitment and capability require a framework of:
•
Ethics
•
Learning
•
Networks
34
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
35
Key dates in the history of innovation
•
1440
•
1840
•
1984
•
1990
•
1995
36
Innovation in Services project
[email protected]
[email protected]
37