Productivity, Innovation and Knowledge in Services

Productivity, Innovation and Knowledge in Services

New Economic and Socio-Economic Approaches

Edited by Jean Gadrey and Faïz Gallouj

Written by some of the most distinguished authors in the field, this book elucidates the critical and complex relationships between services, production and innovation. The authors discuss the limitations of current theories to explain service productivity and innovation, and call for a conceptual re-working of the ways in which these are measured. They also highlight the important role of knowledge in the production system and in doing so make an important contribution to a key debate which has emerged in the social sciences in recent years.

Chapter 2: The Misuse of Productivity Concepts in Services:

Jean Gadrey

Subjects: economics and finance, economics of innovation, services, innovation and technology, economics of innovation


lessons from a comparison between France and the United States Jean Gadrey This chapter summarizes the findings of a research project carried out between 1989 and 1992 in close cooperation with Thierry Noyelle and Thomas Stanback of Columbia University. The aim of the project was to compare productivity in services in France and the United States, and in particular to ascertain whether productivity in services was indeed weaker and productivity gains lower in the United States than in France and whether this could explain the very high levels of job creation in the American service sector and the relatively modest levels in France. This interpretation was very widespread in the early 1990s and is still advanced today. According to our findings, this explanation is, for the most part, an illusion and the main answers to the question are conceptual and methodological in nature. Furthermore, by showing the limits of the traditional concepts in the case of an international comparison, useful pointers can be gleaned as to how to interpret the so-called ‘productivity paradox’ in each country. Why to publish, ten years later, a synthesis of these findings? Because almost nothing changed during the 1990s, either on the conceptual issue, or on that of the productivity trends: the average annual productivity gains in services (as actually measured) remained very low and sometimes negative in the United States during the 1990s,1 and they were lower than in France. The statistical methods of the BLS (Bureau of Labour Statistics) and the BEA...

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