Can Be Mapped to Each of the 4Ts, but Some of the Relationships Overlap

TABLE 5.1 The 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

Characteristics of traditional services Scale

Simultaneity of production and consumption

Features of the services sector Innovation

Inherent role of labor and limited role for capital, hence reduced incentives for innovation

Trends Due to ICT, reduced need for physical proximity Potential for automation and data analytics to leverage labor

Implications for productivity

More efficient matching of supply 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 Likely greater substitution of labor and shifting mix of job tasks (as usually tasks rather than whole jobs can be automated) Potentially higher demand for skills Higher multipliers for employment growth

From increased intangible capital, more incentives to innovate and invest

Spillovers

Multiplier effects from use of enabling services in goodsproducing sectors Expansion of linkages with other sectors, including other services

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 Training—to raise digital and complementary interpersonal skills and management practices Targeting—to expand spillovers

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.