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 5: The Traditional Factors Influencing Productivity

Faridah Djellal and Faïz Gallouj

Subjects: economics and finance, industrial economics, services


5. The traditional factors influencing productivity INTRODUCTION Intensive efforts have been made in the economic and management literature to determine the origin of productivity gains. As a result, it has been possible not only to identify, enumerate and classify, in increasing detail, the levers of productivity but also to develop a number of theoretical models. Some of these models have already been examined in Chapter 1, when we investigated the reasons why the productivity question lies at the heart of economic theory. Excluding the effects of sectoral reallocations of factors (labour mobility, migration, and so on), it is generally agreed that six generic factors influencing productivity can be identified (see Figure 5.1); they are not, of course, independent of each other (CBO, 1981; Harris, 1999; Gamache, 2005): 1. 2. 3. 4. 5. 6. technical factors; human factors; organizational factors; economic factors; political and institutional factors; and social factors. Of these six groups of generic factors, the last three (economic, political and social factors) are macroeconomic and macro-social factors. They are general environmental factors which are particularly ‘inert’ in the short or even medium term. No one firm or organization can change them, but they exert fundamental influences at the microeconomic level. In the case of two of them (political and social factors), any attempt at quantification faces certain difficulties, at least with regard to some of their component parts. The first three groups of generic factors (technical, human and organizational factors) can...

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