Competition, Trends and Policy Issues
Edited by Peter Johnson
Chapter 12: Business services
Joanne Roberts INTRODUCTION The European business service sector has experienced signiﬁcant growth in the past 20 years. Since the mid 1980s employment in the sector has grown at a rate of approximately 5 per cent per annum, reaching a total employment level of over 12 million by the late 1990s (CEC 2000, p.507). Business services make an important contribution to employment and output. The signiﬁcance of the sector is revealed when comparisons are drawn with other sectors of the economy. According to a recent study (CEC 1998, p.7) European business services generate six times as much value added as agriculture, approximately 72 per cent of the value added generated by the manufacturing sector and more value added than banking, insurance, transportation and communication services together. While some business services owe their existence to the regulatory environment, for example auditing and legal services, many others make an important contribution to the core activities of client ﬁrms. In this way business services play a key role in encouraging economic growth and competition throughout the European economy. The Nature of Business Services Business services are extremely diverse, including activities concerned both with handling tangible products, such as machinery repair or catering, and with providing intangible expertise such as accountancy, market research or management consultancy. Business services are producer services. As such they are activities that do not involve direct material production or transformation but are necessary to carry out the full cycle of production in any type of industry. They must...
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