Introduction to service management in economy

service management in business

1. Chapter 1: The Service Economy Service Management: Operations, Strategy, Information Technology (10th Edition)

2. Learning Objectives Define the role of services in the economy Understand the growth and importance of services Explain the stages of economic development Recognize the impact of technology and digital transformation Assess the implications of COVID-19 on service innovation

3. What Is a Service? Intangible activities, processes, or experiences Co-created by provider & customer Cannot be stored or inventoried Simultaneously produced and consumed Example: healthcare, education, banking, hospitality

4. Role of Services in the Economy Largest and fastest-growing sector globally Over 70% of GDP in most developed countries Critical for job creation and value addition Services support manufacturing (logistics, design, IT, after-sales) Service economy forms the foundation of the experience economy

5. Stages of Economic Development Agrarian → Industrial → Service → Experience/Digital economy Service activities rise as economies mature Clark–Fisher Hypothesis (classic model) Extended today by digital platform services and AI-enabled services

6. Sources of Service Sector Growth Increased disposable income & leisure More complex customer needs Globalization of services (BPO, outsourcing, fintech, telemedicine) Advances in IT and automation COVID-19 accelerators: telehealth, e-learning, digital banking

7. The Experience Economy Services enhanced with memorable experiences Examples: Starbucks, Disney, Airbnb Pine & Gilmore (1999): Experiences as an economic offering 10th Edition update: hybrid physical-digital experiences

8. Technology & Services IT enables self-service technologies (apps, kiosks) Data analytics for personalization AI/Chatbots in customer service COVID-19 → digital adoption leap (contactless services, teleconferencing)

9. Continuous Quality Improvement Service organizations must adapt quickly Continuous improvement in processes Focus on enhancing customer experience Integration of human + digital touchpoints

10. Managerial Implications Balance efficiency vs experience Use service design & innovation strategically Integrate technology, people, and process Build resilience against disruptions (COVID, supply chain shocks)

11. Key Takeaways Services dominate modern economies Growth is driven by technology & globalization COVID-19 reshaped service delivery & innovation Managers must embrace strategic service thinking

12. Discussion Questions How did COVID-19 permanently reshape service industries? What role will AI and automation play in future services? Can every business become partly a 'service business'?