Measuring and Improving Productivity in Services

Measuring and Improving Productivity in Services

Issues, Strategies and Challenges

Services, Economy and Innovation series

Faridah Djellal and Faïz Gallouj

The definition and measurement of productivity in services raises important conceptual, methodological and strategic problems. This book aims to provide a critical review of the main debates on productivity in the domain of services. The first part examines the theoretical consequences of services specificities on the concept of productivity and reviews the attempts to measure it. The second part is devoted to the main determinants of productivity growth and the strategies to increase productivity in service firms and organisations.

Chapter 3: Public Services: A New Challenge

Faridah Djellal and Faïz Gallouj

Subjects: economics and finance, industrial economics, services


INTRODUCTION Non-market services constitute a new challenge to the concept of productivity. After all, in addition to the difficulties posed by the very nature of a service activity, they add others linked to the activity’s public or nonmarket characteristics. The definition of non-market or public services and of their scope is also a question to which no immediate answer can be given. Nevertheless, we will not be entering this debate here. For simplicity’s sake, we will confine ourselves essentially to three types of public services: first, public service enterprises (such as national postal services or railway companies); second, public services such as health and education; and third, public administration (central and local government). Although the second and particularly the third group are the main objects of investigation in this book, we will not be completely ignoring the first one. After all, concerns about productivity have infiltrated the public sphere, starting with public service enterprises, which have many points in common with service companies in the market sector. Consequently, these public enterprises constitute an interesting test bed for investigating the notion of productivity in services, located at the intersection between the productivity-related issues that have traditionally been a concern in the market sector (see previous chapter) and those raised by the public sector. Thus for those seeking to examine the question of productivity, they represent an interesting area of transition between market services and government services. Once again our aim here will be to examine, first, the...

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