Sunday, March 29, 2015

Services and the Productivity Factor

In recent decades, services have become a more important part of economies in general. Still, there are lingering questions as to services productivity. How does one meaningfully measure services productivity, compared to manufacturing labor divisions which are easier to understand and compensate? That's not an easy question to answer.

One needs to account for whether customers expect time to be fully represented, in the final product. For instance: in food production services, entrepreneurs make choices between labor and automation which include easy to measure outcomes. In instances such as these, productivity gains result when less labor is required for the final product. What to do then, about the circumstance when personal time is the most sought after product element? Particularly when service roles are now the primary employment option in the marketplace? Might time based services eventually disappear, for the "sake" of greater productivity?

Many organizations - particularly those which serve a wide range of customers - see little choice but to take the route of less personal assistance wherever possible. In the meantime, the kind of personal service that matters get relegated to those who can pay a premium for it. While customers may not mind automated restaurant service, no one likes automated recorded messages, when they need to tell a real live person that someone neglected to record a properly paid bill. Ultimately, services need to more closely approximate what people want, if individuals are to keep the faith in free market integrity.

But where to begin? First, productivity needs to be thought of differently for services formation. Institutions need local and overlapping sets of coordinated missions, capable of making time aggregates central to the process. Fortunately, production reform is generally not needed for product that exists separately from personal time. Traditional factories can organize activity just as they always have, no matter where they are.

Rather, change is needed for the services functions which smaller groupings and communities have not been able to generate until now. Unfortunately, this has left too many populations dependent on regions elsewhere, with little means to reciprocate economically. Today, many communities lack the economic complexity which allows important service functions to take place. Knowledge use systems would seek to restore vital forms of coordination and trust, that small economies have not been able to generate since the changed circumstance of agriculture.

Through local services systems, it would gradually become possible to bring measurable productivity to time based services product. A self sufficient approach that leaves no remaining time or monetary debt, would make it possible to bring back services which have been persistently taken away at the margin for decades.

Consider public schools, where today's emphasis on core education largely replaced once routine options such as home economics, art classes or music theory. Even though core studies are vital, it is wrong to take away other practical and desirable elements of education, particularly in the years when they matter most. Equally important is the need for healthcare - in all its variety and nuance - to be studied and provided for at local levels.

By reintroducing time as a directly compensated service factor (where time is the relevant product) service markets can once again flower with true economic diversity. Knowledge use differentiation has the potential to turn around a complete lack of economic complexity, in low population areas. In the growing search for decentralization, it helps to remember that not all forms of decentralization are as necessary or desirable as services diversity. Fortunately, free markets are still relatively strong in terms of tradable goods, and this is where globalization and national markets still hold a valuable place in the economic realm.

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