Governments Role in Service Science and Innovation in Services

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• Governments Role in Service Science and
  Innovation in Services
• Allan Mayo
• BERR Services Policy Unit
• 22nd Service Conference and Workshop
• 7 November 2008

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Presentation will cover

• Size and importance of services to the economy
• Drivers of change
• Impact of the Public Sector
• Focus of business innovation
• Skills to promote service innovation and business
  performance

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Importance of Services Sector to the UK Economy
since 1945
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Sector GVA as a proportion of UK economy in 2006
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UK trade in services 1996-2006
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UK services sector exports 1996-2006
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Exports of business services
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UK/US productivity gap
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Coverage a focus on five services sectors

• Retail
• Logistics
• Construction
• Environmental services
• Internet delivered content services
• 25 of UK output by GVA, reflect diversity of
  service sectors

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Methodology and coverage

• Four questions examined
• Drivers of change
• Way services sector innovation has changed and
  how it might be measured
• The barriers to innovation
• The scope for effective government intervention

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What are the drivers of service sector innovation?

• Increasing power of consumers
• ICT is the key technological driver and enabler
  of change.
• Globalisation/competition
• Sustainability
• Impact of the public sector

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Increasing power of consumers
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ICT is key technological driver

• Drivers of innovation and growth in services

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ICT Innovation comes in waves
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Globalisation Quarterly Trade in Services
(current prices, not seasonally adjusted)
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Sustainability
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Impact of the public sector
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Impact of the public sector
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Impact of the public sector
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Impact of public sector
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Impact of public sector
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Impact of the public sector
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Impact of the public sector
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Elements of service innovation

• Capture and use information
• anticipate customer needs
• market and competitor trends
• analyse own performance
• Management, people skills
• respond to opportunities, threats
• exceed customer expectations
• Quality framework
• Standards
• Business planning, processes

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Management of change

• Analysis suggests high level management skills
  are not widespread in UK business
• Action needed to strengthen business engagement
  with learning opportunities and leading practice
• Develop focus on transformative application of
  ICT to business processes and scope to promote
  this via a network of expertise

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Business Challenges Financial Times 2/09/08

• S Koreas KDB confirms talks with Lehman

Chrome outshines rivals to become fastest browser
Babcock in deal to train engineers
Vivendi says GE will not sell stake in NBCU
Potential buyers circle for slice of Dresdner
Mantua maverick climbs aboard at Alitalia
Sainsbury to push own-brand goods
Foreign insurers face barriers to enter China
Ferrovial It rode the construction boom at home
and diversified abroad - especially into the UK,
with airport operator BAA, and into the Americas,
with toll roads..
Nokia plans mobile music service in the UK
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Transforming Public Services
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Promoting learning in Government
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Improving public sector procurement

• clear joint objectives
• mutual understanding
• developing ongoing relationship
• appropriate risk sharing
• opportunities for innovation
• flexibility

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Service science is not enough

• Commitment and capability require a framework of
• Ethics
• Learning
• Networks

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What should we aim to deliver?

• UK succeeds as hub for high growth, knowledge
  intensive services, attracting the leading global
  players to locate here
• UK closes productivity gap with US in services

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Report URL http//www.berr.gov.uk/files/file4744
0.pdf
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BERR Services Policy Unit

• allan.mayo_at_berr.gsi.gov.uk
• chris.tollady_at_berr.gsi.gov.uk