A Services-Dominant View of the Situation

There has been recent emphasis on the importance of services and service economies as we move into an anticipated period of deepening integration of ICT into the fabric of global society. The growth of services in the economy is sometimes measured by the relative percentage of employment in three major sectors of an economy, agriculture, manufacturing, and services. By this form of reckoning, employment migrated from over 90% agricultural in 1800, to a majority in manufacturing by the end of World War II. Since then services has risen to a dominant position in U.S. employment, and this pattern is rapidly being repeated all over the world.

This so-called “services dominant logic” defines service as “application of specialized competences … through deeds, processes, and performances for benefit of another entity or the entity itself ”  In marketing and accounting for economic activity, this view turns attention away from goods and toward exchange of intangibles in the form of specialized skills, knowledge, and processes. Of course, Korzybski reminds us that this is one way of looking at things. Looking at the economy in a services-dominant way does not preclude other viewpoints. On the other hand, some might say that service dominance is not unique to the 21st Century. Vargo and Lusch quote Frederic Bastiat from1860, “The great economic law is this: Services are exchanged for services… It is trivial, very commonplace; it is, nonetheless, the beginning, the middle, and the end of economic science.” Clearly the services-dominant model has been around for a long time. The fact that a more product-centric model has been the standard viewpoint is as much a mindset as a reflection of reality. However, these viewpoints and models have a large effect on choices made and the direction of events. If the economy looks like a product-producing machine, it reinforces machinelike product producing and product consuming behavior.

The services dominant model of the economy reinforces the focus on sociality in enterprise. The canonical service is intrinsically human, with either the recipient, or the provider, or both, being people. Even with increasingly technology-based services (ATMs, downloadable legal assistance, etc.), the functioning of the technology is traceable back to its inventors, makers, and distributors, who, in a very real sense, are people who are providing services to other people but liberated from time and distance constraints by the mediation of technology. A growing and evolving fabric of services performed by people on behalf of machines, as well as by machines for machines, enables all of this. The point here is that service-based enterprise is recognized as a major beneficiary of the deeper incorporation of ICT into existing economies. The social interactions that are necessary for enterprises are enabled by ICT that allows people to interact at a distance.

As part of the background of the world situation, we observe that ICT itself is evolving to support a service and people-oriented economy. Communication networks and continuous connectivity are becoming nearly ubiquitous. We are living in a mash-up world, in which Internet technologies make global markets commonplace. These developments have made possible a range of on-line marketplaces (e-Bay, etc.) for previously undervalued and low-demand specialty assets. People are flocking to social networking applications, such as Facebook, and LinkedIn. We are rapidly moving from Goffman’s presentation of self in everyday life  to the projection of self. The projection of self is being made possible be feeding images and other information into and through various ICT-created spaces.

Ironically, in this apparent age of services economic systems we observe that often the capability and potential of people in services relationships is undervalued and undercapitalized. In many circumstances people are treated as factors of cost, rather than as engines of value-creation. It can be argued that human capabilities and inter-relationships actually constitute the primary source of value in a world of increasingly urgent problems and opportunities, yet the creation of value by individuals operating within human social systems is often ignored or downplayed.

All of these factors of the problem and opportunity environment converge to reinforce the perception that the social aspect of enterprise is of utmost importance, and deserves specific attention and cultivation. The next section provides some such attention.