TABLE 5.1 T he Increased Scope for Scale, Innovation, and Intersectoral Spillovers Can Be Mapped to Each of the 4Ts, but Some of the Relationships Overlap Impacts of the changing nature of services on productivity and jobs and resulting policy implications Aspect
Features of the services sector Scale
Innovation
Spillovers
Characteristics Simultaneity of production and of traditional consumption services
Inherent role of labor and limited role Multiplier effects for capital, hence reduced incentives for from use of enabling innovation services in goodsproducing sectors
Trends
Potential for automation and data analytics to leverage labor
From increased intangible capital, more incentives to innovate and invest
Expansion of linkages with other sectors, including other services
Implications for More efficient matching of supply productivity and demand, hence expanding tradability and widening market access to increase scale
Innovation boosted by gains in scale and efficiency in business processes
Improved service quality and incentives for innovation (with some impact on scale too)
Greater spillovers for other sectors, including other services
Implications for jobs
Potential expansion of job locations, with higher demand increasing the number of jobs
Potentially higher Likely greater demand for skills substitution of labor and shifting mix of job tasks (as usually tasks rather than whole jobs can be automated)
Higher multipliers for employment growth
Policy implications to realize benefits of these trends
Trade—to lower barriers to services trade and competition, hence expanding access to markets
Technology—to improve access to ICT and technology adoption, with complementary policies to ensure competition and inclusion
Targeting—to expand spillovers
Due to ICT, reduced need for physical proximity
Training—to raise digital and complementary interpersonal skills and management practices
Source: Summary based on chapters 1–5. Note: The arrows indicate the mapping of each forward-looking trend (reduced proximity, automation, intangible capital, and linkages) to the 4Ts agenda. ICT = information and communication technology.
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At Your Service? The Promise of Services-Led Development
