Competitive services are crucially important for economic growth and the creation of jobs. The spectrum of services is wide, and for that reason there is no one single recipe for success in their development. Vital services and social and healthcare services are very much the same thing, but there are also very different types of service which are based on special customer needs. Services for consumers often differ from business-to-business services.
In everyday language, a service means independent mental or manual work done on another’s behalf for payment. A service may relate to the delivery of goods, where a line is drawn between goods and services. The division is often very blurred. Services may also be highly or totally automated, or information technology may be a channel for the production of services.
Service innovation may either be a new way of providing a customer with a service or a brand new service altogether. The growth in the information-based economy and the production and storage of digital information that goes with it are bringing new dimensions to the market. Services are no longer merely local commodities for production and consumption here and now: they are storable and modifiable, available wherever and whenever. The service industry is made up of value chains in which the customer decides the services he/she wants, what form they should take (quality) and when to use them.
It may be a private company or the public sector, often a local authority that may be the agency organising the services in the service industry. The quest for economies of scale and the benefits of specialisation in service production have resulted in networked operational models, which often include third sector agencies. More and more often service packages are realised as a collaboration between the public and private sector. If new service models and technological applications are to be developed and deployed effectively, the public and private sector will need to network intensively, cooperate and allocate responsibilities coherently.