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Internationalization, Technology and Services

Edited by Marcela Miozzo and Ian Miles

This book examines the way in which the increasing internationalization of services, including the operation of multinationals in this sector, interacts with the process of innovation in services. The book challenges the theoretical traditions that have developed around the analysis of service innovation and internationalization, and argues for a new research agenda. The distinguished contributors address many of the most pertinent issues and adopt a variety of theoretical and empirical approaches to enrich the debates.
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Chapter 2: Internationalization and the Demarcation between Services and Manufactures: A Theoretical and Empirical Analysis

Grazia Ietto-Gillies


Grazia Ietto-Gillies INTRODUCTION1 Most economic and social changes of the last two decades have their roots in two main developments: the increased degree of international integration worldwide, and the introduction of new technologies, particularly information and communication technologies (ICTs). These two developments are interconnected in that the globalization process could not have taken off without ICTs. Moreover, the rate of diffusion of the new technologies is greatly enhanced by the economic forces behind the globalization process and in particular by the activities of the transnational corporations (TNCs).2 These developments have profound effects on a variety of economic and social elements including the introduction of new products and processes, the need for new skills, the development of new forms of organization of production within firms and industries and of stronger linkages between products and between industrial sectors. This chapter is concerned with the latter effect and in particular with the analysis of the way internationalization and innovation interact with the demarcation between services and manufactures. Demarcation and taxonomy in general are theory-driven and this is true also in the case of the demarcation between services and manufactures. In our case the issue is now further complicated by the impact that the new technologies are having on the nature of products and their relationship with each other, the production processes and the organization of production in time and space. The chapter will briefly consider two main demarcation criteria based on the tangibility of the products and on...

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