References: Service businesses in a global economy

This curriculum is founded on two principles:

business is shifting from a product-oriented, industrial economy to a services economy; and
globalization, thanks to information and communications technologies and (relatively) open national borders, has the advanced economies of the later 20th century challenged by workers in emerging and developing countries.

Since most advanced economies have become service economies, it’s probable that the students of this class will end up managing services businesses. They need to think somewhat differently.

Uday Karmarkar, “Will You Survive the Services Revolution?”, June 2004. (See the article at HBR [1])
- Abstract: We are in the middle of a fundamental change, which is that services are being industrialized. Three factors in particular are combining with outsourcing and offshoring to drive that transformation: The first is increasing global competition, where just as with manufactured goods in the recent past, foreign companies are offering more services in the United States, taking market share from U.S. companies. The second is automation: New hardware and software systems that take care of backroom and front-office tasks such as counter operations, security, billing, and order taking are allowing firms to dispense with clerical, accounting, and other staff positions. The third is self-service. Why use a travel agent when you can book your own flight, hotel, and rental car online?

(We should include some references describing what a services economy really is. Services businesses include: financial services, health services, educational services, logistic and transportation services, hospitality services, and KIBS (knowledge intensive business services), including consultancy).

The “world is flat” has become conventional business wisdom. You should take a quick read, if you haven’t already!

Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-First Century, Farrar, Straus and Giroux, 2005
- Also see http://www.thomaslfriedman.com/worldisflat.htm [2] .
- For counterpoint, see Richard Florida, “The World is Spiky”, Atlantic Monthly, October 2005, pp. 48-51, at http://www.creativeclass.org/acrobat/TheWorldIsSpiky.pdf [3] .

These references are suggested as part of the Stadia 2006 International Service Business Management Sessions [4]. Please respond with comments to suggest additional readings or express opinions on those above.