New service economy perspectives for publicly-funded and -provided services

In the industrial economies, economic values were created predominantly locally, in-house and mechanically, and services were understood as a residual category as anything that could not easily be classified as a primary or manufacturing activity. Service industries were characterized by low-paying, low-skill and manual jobs with neither productivity growth nor radical innovations.

Due to changes in the international division of labour and strong productivity improvements in manufacturing, service industries went through a rapid growth and the western countries converted into service economies, where service industries provide much more job opportunities than classic industries. In the new service economy, services dominate value systems and services are integrated into every stage of the value chain. Moreover, productivity growth has also become possible in services mainly through ICT-tools and network arrangements. 

The fundamental research idea of the project is to explain how the paradigmatic (radical) innovations of the new service economy contribute to service improvements. The purpose of the project is to demonstrate new evidence about connections between innovative governance arrangements and economic efficiency in publicly-funded and -provided services. The project will analyse successful and unsuccessful public policy measures, which have aimed to support productivity improvements through public private collaboration or competition in different service sectors.   

At a practical level, the project team will also make efforts in order to look for and collect external research funding for this topic, disseminate new international research results among Finnish service development agencies and public officials, and expand academic networks with international research institutes and foreign universities, who are interested in the studies of the new service economy.