tag:theconversation.com,2011:/au/topics/services-30548/articlesServices – The Conversation2022-02-20T17:26:01Ztag:theconversation.com,2011:article/1737162022-02-20T17:26:01Z2022-02-20T17:26:01ZAshamed of asking for technical support? You are not alone!<p>The spread of new technologies tied to a race for innovation, products and services’ growing interdependence and, more generally, <a href="https://theconversation.com/will-services-be-the-saviour-of-manufacturing-70081">the transformation of products into services</a> can also make them more complex to use. To help consumers, companies are introducing a wealth of instructions, tutorials and pictograms that can be difficult to understand, all too often leaving consumers even more <a href="https://theconversation.com/confusopoly-why-companies-are-motivated-to-deliberately-confuse-39563">confused</a>.</p>
<p>The scene is all too familiar: who has never scratched their head in front of a machine, a new device or trying to complete an online booking? While many innovations are often designed and implemented to ease the consumer’s daily life, they may also be the source of new problems. Consumers adopt various strategies to cope with these difficulties of use: online tutorials, help from neighbours or friends, but many, perhaps surprisingly, also end up dropping their new product or service altogether.</p>
<p>The reasons for not seeking help may be psychological. In the field of social psychology, over the last 40 years, researchers have been exploring help-seeking in various contexts, mostly focusing on medical and psychological help or on help-seeking in the classroom. It appears that not everyone is <a href="https://www.washingtonpost.com/lifestyle/wellness/asking-help-coronavirus-hard-shame/2020/04/17/e1d3ef90-7e91-11ea-8013-1b6da0e4a2b7_story.html">comfortable asking for help</a> and that some individuals systematically seem to avoid seeking help. </p>
<p>Indeed, help-seeking may be perceived as threatening, as it may call into question the applicant’s personal competence in his or her own eyes. But he or she may also fear appearing incompetent in the eyes of the helper. Help-seeking also conflicts with important values for Westerners: autonomy and control. Finally, it may restrict one’s freedom of choice, for example when feeling forced to accept a commercial offer in return for the help given.</p>
<h2>Fear of appearing incompetent</h2>
<p>In our article to be published in the journal <a href="https://journals.sagepub.com/home/rme"><em>Recherches et Application en Marketing</em></a>, we explored one of the possible responses for the modern troubled consumer: seeking the supplier’s help. Although it appears to be a fairly obvious solution, it is not often used by consumers.</p>
<p>Through a series of studies, we sought to understand whether avoiding to seek help exists in a consumption context when a customer finds it difficult to use a product or service. A qualitative study and four quantitative studies (samples between 150 and 450 individuals) led us to the conclusion that more than a third – a significant and seemingly large proportion – of consumers tend to avoid asking for help.</p>
<p>These studies also enabled us to build a psychometric measurement tool to assess the tendency of each individual to be more or less avoidant. The common behaviour of help-seeking avoidance is based on two dimensions, stemming from the qualitative part of the study. The first dimension is the refusal to ask for help because it causes embarrassment or even shame for the asker, as one consumer we interviewed explained:</p>
<blockquote>
<p>“Sometimes you feel ashamed, because you are afraid that the person you are talking to might think you don’t understand anything.”</p>
</blockquote>
<p>The second dimension lies in the evaluation of the interlocutor. More specifically, in both their perceived willingness and their perceived ability to help, as illustrated by this statement of a consumer:</p>
<blockquote>
<p>“[Companies] are all the same, they are always rude and they never solve your problems.”</p>
</blockquote>
<p>These two dimensions contribute to explain consumers’ intention to seek help or not. This research also highlights the relationship between the avoidance tendency and specific psychological traits such as an external <a href="https://dictionary.apa.org/locus-of-control">locus of control</a> (the tendency to attribute the cause of events outside one’s control to others, a specific context, for example), <a href="https://dictionary.apa.org/state-orientation">state orientation</a> (the tendency not to act) and <a href="https://www.nhs.uk/mental-health/conditions/social-anxiety/">social anxiety</a>.</p>
<h2>Companies can take action</h2>
<p>Difficulties encountered are admittedly damaging for the consumer, but they are also ultimately damaging for the company. Indeed, a customer who cannot have full use of one’s product may abandon not only the product, but the brand. One may also express dissatisfaction or frustration and spread negative word of mouth. Incidentally, there is a high failure rate for high-tech product launches.</p>
<p>What can companies do to ease and encourage requests from their customers? First of all, they can act on the potential embarrassment. Indeed, it appears that help requested through a screen leads to less discomfort. In this respect, live chat is a very interesting tool to encourage the triggering of requests.</p>
<p>In addition, companies can communicate about their willingness and ability to assist their customers – and dedramatise assistance requests. Indeed, many companies still do not advertise on means available to contact them, often for fear of having to manage too many customer contacts. According to our research, this is interpreted by consumers as unwillingness to help.</p>
<p>Moreover, communicating the positive results of customers requesting help or, more generally, of contacts with the customer service would also be an effective lever. Finally, in addition to being beneficial for customer satisfaction, requests for help can have another positive impact: for example, they allow improvements to be made to products and services.</p><img src="https://counter.theconversation.com/content/173716/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ben Voyer has received funding from the Cartier - ESCP - HEC Paris Turning Points Chair</span></em></p><p class="fine-print"><em><span>Marion Sanglé-Ferrière ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>One person out of three does not dare to turn to the supplier in case of problems. Feeling of shame, as well as doubts about the ability of the person they are dealing explain that figure.Marion Sanglé-Ferrière, Maître de conférence en marketing, CY Cergy Paris UniversitéBen Voyer, Cartier Chaired Professor of Behavioural Sciences, Full Professor, Department of Entrepreneurship, ESCP Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1654202021-09-21T14:27:02Z2021-09-21T14:27:02ZCorruption in state-owned companies hurts low skilled workers the most: we show how<figure><img src="https://images.theconversation.com/files/421381/original/file-20210915-25-6hh7d3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">State-owned enterprises, such as Transnet, which runs South Africa's ports, loom large over the economy</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>State-owned enterprises are companies in which government owns, directly or indirectly, more than 50% of the shares. Worldwide, <a href="https://cesd.az/new/wp-content/uploads/2017/12/State-Owned-Enterprises-Azerbaijan.pdf#page=3">states own 10%</a> of the largest companies. In South Africa, state-owned enterprises <a href="https://documents1.worldbank.org/curated/en/798071529303940965/pdf/127288-WP-P161945-PUBLIC-Corporate-Governance-in-South-African-SOEs.pdf#page=2">play a significant role</a> in the important sectors of mining, energy, communications, air and rail transport.</p>
<p>Some state-owned entities loom large over the economy. <a href="https://dpe.gov.za/state-owned-companies/eskom">Eskom</a>, for example, accounts for about 95% of electricity generated in South Africa and is responsible for the transmission and distribution networks. <a href="https://dpe.gov.za/state-owned-companies/transnet/">Transnet</a> controls the entire non-passenger rail transport system and the country’s ports and pipelines. </p>
<p>State-owned enterprises were initially designed to promote effective and efficient service delivery in the country. They are a big part of South Africa’s <a href="https://www.oecd.org/corporate/south-africa-state-owned-enterprise-reform.pdf#page=2">economic growth and development strategy</a>. The strategy aims at diversifying the economy and requires state-owned entities to provide services and infrastructure to the private sector.</p>
<p>Global experience shows that when state-owned enterprises are well managed and good governance is in place, <a href="https://www.imf.org/en/Publications/WP/Issues/2019/11/22/Governance-and-State-Owned-Enterprises-How-Costly-is-Corruption-48800">state-owned enterprises</a> can provide essential commodities and services to the population at affordable cost. The reverse is also true. When they are poorly managed, state-owned enterprises directly affect the poor the most. The poor are the most vulnerable to failure by the state and its entities. The poor performance can manifest itself through ineptitude, corruption and generally poor delivery of public services.</p>
<p>Often, state-owned enterprises <a href="https://www.econbiz.de/Record/the-current-situation-and-problems-of-state-owned-enterprises-in-azerbaijan-hashimova-kamala/10012053706">receive advantageous treatment</a> by the state. They may get discounted funding, government supported guarantees, direct subsidies and favourable regulatory treatment. They are also often exempted from antitrust enforcement and insolvency regulations. </p>
<p>Lastly, they are directly linked to the governmental budget through guarantees, bailouts, foreign investments and debts. </p>
<p>But state-owned enterprises are often vulnerable and prone to corruption. This can severely undermine their performance. In addition, governmental support can result in lower production efficiency and poor economic performance. This is because the protection they get often insulates them from competition.</p>
<p>In South Africa, for example, citizens frequently experience <a href="https://theconversation.com/why-south-africas-electricity-blackouts-are-set-to-continue-for-the-next-five-years-155233">electricity power cuts</a>. These are the result of the poor performance of the state-owned utility, Eskom. Numerous witnesses at the <a href="https://www.statecapture.org.za/">commission into allegations of state capture and corruption</a> pointed to favouritism, fraud and corruption at Eskom and Transnet.</p>
<p>Given the big role state-owned enterprises play in the South African economy, it is important to understand their impact on economic growth. Equally important is understanding how these effects are transmitted throughout the economy.</p>
<p>So, we <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/apce.12339">used a macroeconomic modelling simulation framework</a> to explain how reduced economic performance and reduced foreign investments influence the economy.</p>
<p>Our findings are that the inefficiencies of state-owned enterprises and high levels of corruption within them do spill over to the rest of the economy. These negative spillovers include reduced economic growth and income as well as job losses, leading to increased risk of poverty. Low skilled workers in particular are the most affected. This is the cohort that has also been hard hit by COVID-19 because the industries in which they are employed have been most affected by reduced economic activity.</p>
<p>The channels through which the performance of state-owned enterprises is transmitted to the rest of the economy that we analysed are the same for other countries too, developing as well as developed.</p>
<h2>A spiral effect</h2>
<p>The poor performance of state-owned enterprises has a cascading effect throughout the economy. The channel is as follows. It first raises their operating costs, which in turn affects companies and economic sectors that are directly dependent on the services provided by the state-owned enterprises. This reduces the domestic and international competitiveness of these sectors.</p>
<p>It eventually spreads to the entire economy. This makes the country’s exports less competitive. As a result, exporting firms reduce production and eventually lay off workers. This increases unemployment, which in turn reduces household income and therefore <a href="http://www.statssa.gov.za/publications/P0441/P04412ndQuarter2021.pdf#page=6">household consumption</a>, which is one of the drivers of growth.</p>
<p>In time, economic growth weakens, further reducing the economy’s capacity to create jobs. Weakened growth also implies reduced savings, investment and lower tax collection by government. This further constrains the government’s ability to increase various transfers and welfare redistribution efforts.</p>
<p>Fraud and corruption also lead to mistrust in government by citizens and by domestic and foreign investors. This hampers investment, which slows down economic growth, causing further increases in unemployment.</p>
<p>While corruption and fraud make a few rich households richer, the poor and low-skilled lose their jobs and become poorer. </p>
<p>Our analysis helps establish the direct and quantified links to increases in inequality and poverty.</p>
<h2>Conclusion and outlook</h2>
<p>Government ownership of certain businesses can ensure that citizens and industries have access to important commodities and services at affordable prices. But government ownership on its own doesn’t guarantee these outcomes.</p>
<p>Government’s participation in economic activity can open the door to corruption and fraud. The negative effects of the subsequent underperformance won’t be limited to state-owned enterprises. They spread throughout the economy, and eventually affect economic growth, unemployment, household income and consumption.</p>
<p>The only winners in this vicious circle are the minority of a few rich and politically powerful individuals. The poor families of low- and unskilled workers bear the brunt of a weak economy.</p>
<p>The priority for the South African government should be to restore the competitiveness of state-owned enterprises to create a virtuous cycle of increased citizen and investor confidence, which in turn will lead to higher economic growth.</p><img src="https://counter.theconversation.com/content/165420/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Corruption and fraud make a few rich households richer. But the already poor and low-skilled lose their jobs and become poorer.Margaret Chitiga-Mabugu, Dean of the Faculty of Economic and Management Sciences, University of PretoriaHelene Maisonnave, Professor of Economics, Université Le Havre NormandieMartin Henseler, Researcher, EDEHN - Equipe d'Economie Le Havre Normandie, Université Le Havre NormandieRamos Emmanuel Mabugu, Professor, Sol Plaatje UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1641322021-07-28T14:23:04Z2021-07-28T14:23:04ZBrexit: UK services are losing out to EU rivals – but Asia could be big winner<figure><img src="https://images.theconversation.com/files/413532/original/file-20210728-13-u8gtvi.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Singapore looks like one of the big winners from Brexit. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/singapore-downtown-beautiful-dawn-160541894">joyfull</a></span></figcaption></figure><p>Seven months after Britain’s exit from the EU, the chilly effects on UK trade are being felt. Total exports of UK goods and services were down by 13% (£36 billion) and imports down 22% (£66 billion) for January to May 2021 compared to the same period in 2019, <a href="https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/articles/theimpactsofeuexitandcoronaviruscovid19onuktradeinservices/july2021">according to</a> the Office for National Statistics (ONS). </p>
<p>In a separate new <a href="https://www.ons.gov.uk/businessindustryandtrade/internationaltrade">ONS report</a> into UK services, exports and imports fell 12% and 24% in the first quarter of 2021 compared to the same period in 2019. To some extent this is due to the pandemic, but the decline with EU countries was more severe (exports down 15% and imports by 39%), which suggests Brexit was relevant too. The difference between services exports to EU and non-EU countries was particularly marked in sectors like construction (-43% vs +24%), maintenance and repair (-62% vs +11%), and manufacturing services (-40% vs -12%). </p>
<p>It seems to confirm that the UK’s services offering has been made less competitive by the <a href="https://ec.europa.eu/info/relations-united-kingdom/eu-uk-trade-and-cooperation-agreement_en">EU-UK Trade and Cooperation Agreement</a> hardly covering such business. This has left EU members free to decide whether to allow different UK providers into their markets. But as we shall see, other services exporting countries outside the EU may also benefit as a result.</p>
<p>In our <a href="https://research.aston.ac.uk/en/publications/uk-trade-in-the-time-of-covid-19-a-review">recent paper</a>, Ireland looked like the big winner. It has probably benefited from firms relocating and business being re-routed from the UK, not to mention low corporation tax and a young well-educated workforce. Between 2016 and 2019, Ireland’s services exports rose 24% (that’s €144 billion or £123 billion), driven by financial services, IT and transport. </p>
<p>Speculation still abounds about which other EU cities will benefit in the medium term. <a href="https://theconversation.com/amsterdam-ousts-london-as-europes-top-share-hub-taking-trading-back-to-where-it-all-began-155236">Amsterdam surpassed London</a> as Europe’s largest share-trading centre in January by absorbing much trade in euro-denominated assets, though <a href="https://www.irishtimes.com/business/health-pharma/london-reclaims-top-share-trading-spot-from-amsterdam-1.4609855#:%7E:text=London%20reclaims%20the%20top%20spot,city's%20volumes%20to%20the%20continent.">London has been</a> back on top recently. Other potential winners include Frankfurt (banking), Luxembourg (banking and asset management) and Paris (financial, professional and business services). Even a less serious contender like Berlin can attract tech talents thanks to its culture clusters and affordability. </p>
<p><a href="https://www.project-syndicate.org/commentary/brexit-impact-on-london-financial-center-by-howard-davies-2021-05">On the other hand</a>, most financial traders have so far remained in London. The city is <a href="https://www.pwc.com/gx/en/audit-services/ipo-centre/assets/pwc-global-ipo-watch-q1-2021.pdf">still strong</a> in hosting stock market flotations and other forms of capital raising. And the flow of financial jobs out of London <a href="https://newfinancial.org/brexit-the-city-the-impact-so-far/">has been</a> a fraction of what remainers predicted. A four-year regulatory transition period for <a href="https://www.skadden.com/insights/publications/2021/02/insights-special-edition-brexit/a-temporary-solution-for-data-protection">areas like</a> data protection and electronic trade will undoubtedly be helping. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="View over Millennium Bridge in London at dusk" src="https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/413549/original/file-20210728-15-8hvqyc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">London vs EU rivals is only half the story.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/tvPvROBv0F4">James Padolsey/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Yet all this misses a bigger picture, namely that Europe’s ability to provide services may have been weakened overall. Imagine a group of US investors wants to invest £1 billion in European shares and other financial assets. In the past it might have set up a fund in London, making use of the city’s network of lawyers, accountants, bankers and other finance professionals, while filtering some of the work to specialists in, say, Paris and Frankfurt for issues related to France and Germany. </p>
<p>But now Brexit means the fund can’t invest in certain EU securities from London. The investors would have to set up a second fund in, say, Dublin to get exposure to all the EU assets they want. The additional expense and time involved makes them decide it will be more lucrative to set up an Asia-focused fund in Singapore instead. </p>
<p>When you multiply this effect across every sector, it is potentially huge. Certainly some investors will decide to either switch attention from the UK to EU countries, or to live with the extra cost of doing business across both the UK and EU. But others are deciding that an opportunity somewhere else in the world now looks more attractive. The danger is that this adds up to a global shift in economic weight over time. In fact, we could be seeing signs of this already. </p>
<h2>Winners and losers</h2>
<p>In follow-on research that we have yet to publish, we have been analysing the services exports of the major service providers in Europe and globally, using <a href="https://www.lbpresearch.ac.uk/wp-content/uploads/2021/05/Feeding-the-Celtic-Tiger-%E2%80%93-Brexit-Ireland-and-Services-Trade.pdf">trade data</a> jointly collected by the World Trade Organization (WTO) and the Organisation for Economic Cooperation and Development (OECD). </p>
<p>The data shows the UK was and is the biggest services exporter in Europe and second only to the US worldwide, but appears to have been losing ground since Brexit. Ireland and the Netherlands are the major growth stories in Europe, while China, India and Singapore are leading the way elsewhere. </p>
<p><strong>Services exports by country, 2019 vs 2015</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Graph showing services exports by country 2019 vs 2015, outlined above and below." src="https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=277&fit=crop&dpr=1 600w, https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=277&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=277&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=348&fit=crop&dpr=1 754w, https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=348&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/410635/original/file-20210709-21-1k45d5n.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=348&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Trends in services exports. Left: 2015 data in solid coloured bars; 2019 change in yellow markers. Right: Green bars represent accelerating service growth; red bars represent decelerating growth.</span>
<span class="attribution"><span class="source">BaTIS</span></span>
</figcaption>
</figure>
<p>The UK’s services growth trend fell 11% in the 2016-2019 period compared to 2010-15. This backs up our recent <a href="https://www.lbpresearch.ac.uk/wp-content/uploads/2021/05/Feeding-the-Celtic-Tiger-%E2%80%93-Brexit-Ireland-and-Services-Trade.pdf">published research</a> finding that the UK’s global share of exported services fell from 8.9% in 2005 to 7% in 2019. </p>
<p>Meanwhile, France, Spain, Italy and Belgium’s growth has also been declining, while Germany, the Netherlands, Switzerland, Luxembourg, Austria and also the US were static. Ireland was the fastest growing services exporter among all, but Singapore and India gained momentum too. </p>
<p>Strikingly, we see increasing growth in Asia between 2016 and 2019 in sectors like travel, financial, IT and creative services. This includes extraordinary growth in Singapore in finance, business, insurance and pension provision, and also in China in numerous segments. It looks like nothing short of a boom. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/413550/original/file-20210728-15-1o3ve8b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Shanghai has been on the up and up.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/lS02c1ZEgJI">Krzystsztof Kotkowicz</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>This may partly reflect the <a href="https://www.weforum.org/agenda/2019/10/are-traditional-multinationals-ready-for-emerging-markets/">industrial transformation</a> taking place in the <a href="https://voxdev.org/topic/macroeconomics-growth/how-services-drive-growth-emerging-economies-evidence-india">Asian developing world</a> from manufacturing to services. It may also capture a <a href="https://www.edhecstudentfinanceclub.com/how-to-build-a-financial-center-lessons-from-history/">long-term shift</a> of services centres from the west to the east – a reshuffle on a truly global scale. </p>
<p>But at the same time, it’s evidence that Brexit has weakened the UK as the European centre for services. Yes, business shifted to Ireland (and Luxembourg) to some extent, but that could be hiding a wider collective setback. </p>
<p>The question for the years ahead, for the UK and its European services peers, is whether they can come up with arrangements that help maintain their collective strengths – and to what extent they can exploit opportunities elsewhere, particularly on developing countries, where US services providers <a href="https://www.weforum.org/agenda/2019/10/are-traditional-multinationals-ready-for-emerging-markets/">have traditionally</a> been far ahead.</p><img src="https://counter.theconversation.com/content/164132/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New data shows the recent damage to UK’s prized services sector – and potentially to Europe as a whole.Jun Du, Professor of Economics, Centre Director of Lloyds Banking Group Centre for Business Prosperity (LBGCBP), Aston UniversityOleksandr Shepotylo, Senior Lecturer in Economics, Aston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1379942020-05-31T19:51:19Z2020-05-31T19:51:19ZAustralia’s first service-sector recession unlike those that went before it<figure><img src="https://images.theconversation.com/files/338460/original/file-20200529-51456-fhds0z.jpg?ixlib=rb-1.1.0&rect=1113%2C197%2C2062%2C1074&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australia is on the brink of its first recession in almost 30 years. </p>
<p>The Australian Bureau of Statistics will deliver the official economic growth figure for the March quarter on <a href="https://www.abs.gov.au/">Wednesday</a>. </p>
<p>If it is negative (as is likely because of the downturn and the bushfires, but not guaranteed because of the surge in spending as Australians stocked up on essentials in March) and is then followed by another negative result in the June quarter (which is all but certain) Australia will be in what some people regard as a <a href="https://theconversation.com/were-staring-down-the-barrel-of-a-technical-recession-as-the-coronavirus-enters-a-new-and-dangerous-phase-132752">technical recession</a>.</p>
<p>But the technicalities don’t matter. Close to <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">20%</a> of Australia’s labour force is either unemployed or underemployed, something that dwarfs previous recessions.</p>
<p>Data already released suggests it will be different in other ways; important ones with important implications. </p>
<p>It will be our first “service sector” recession.</p>
<p>Recessions are usually defined by large falls in investment; in new cars, new houses and new businesses.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/which-jobs-are-most-at-risk-from-the-coronavirus-shutdown-134680">Which jobs are most at risk from the coronavirus shutdown? </a>
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</em>
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<p>As a result, in the early 1990s recession construction and manufacturing businesses were devastated. By contrast, employment in social services, education and food services continued to grow throughout the recession. </p>
<p>This time will be different. </p>
<p>Between March 14 and May 2 some <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/6160.0.55.001Main%20Features5Week%20ending%202%20May%202020?opendocument&tabname=Summary&prodno=6160.0.55.001&issue=Week%20ending%202%20May%202020&num=&view=">27%</a> of the jobs in the accommodation and food services industry vanished, 19% of the jobs in the arts and recreation industry, and 11% of the jobs in professional and technical services – all well above the 6.5% and 7% of jobs lost in construction and manufacturing.</p>
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<p><strong>Jobs lost by industry, March 14 to May 2</strong>
,</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=478&fit=crop&dpr=1 600w, https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=478&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=478&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=600&fit=crop&dpr=1 754w, https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=600&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/338478/original/file-20200529-51449-whfu2g.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=600&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/6160.0.55.001Main%20Features5Week%20ending%202%20May%202020?opendocument&tabname=Summary&prodno=6160.0.55.001&issue=Week%20ending%202%20May%202020&num=&view=">6160.0.55.001 - Weekly Payroll Jobs and Wages in Australia, Week ending 2 May 2020</a></span>
</figcaption>
</figure>
<hr>
<p>The closure of Australia’s borders coupled with the ongoing fear of infection, creates the risk that service sector job losses will continue to grow.</p>
<p>Even when the recession is over, they won’t bounce back in the way that manufacturing and construction jobs might have.</p>
<p>When previous recession temporarily slowed demand for things such as cars and buildings, the pent-up demand led to a surge in sales when incomes recovered.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/unlocking-australia-what-can-benefit-cost-analysis-tell-us-136233">Unlocking Australia: What can benefit-cost analysis tell us?</a>
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</em>
</p>
<hr>
<p>But services are harder to store over time. Someone who skips the hairdresser for a year won’t buy a year’s worth of haircuts when conditions improve.</p>
<p>Nor will someone who stops going to pubs (probably) buy six months worth of drinks when pubs reopen. </p>
<p>It means most service sector businesses can’t expect a quick rebound. Four out of every five employed Australians work in services.</p>
<h2>Not your grandparent’s recession</h2>
<p>The usual playbook for dealing with a recession is to target the sectors most affected. This has meant rolling out big infrastructure projects that can hire newly-unemployed construction workers, and cutting taxes to encourage businesses to expand and hire.</p>
<p>But that strategy won’t be as effective this time. The tour guides and massage therapists whose service sector jobs have been destroyed are ill-suited to building high-speed trains.</p>
<p>And a lot of infrastructure programs are designed on the basis that Australia’s population would continue to expand. With almost two thirds of Australia’s population growth driven by overseas migration and borders now closed, that is no longer certain. Many projects that were previously considered worthwhile may no longer stack up.</p>
<p>The government will have to focus its recovery programs on those sectors hardest hit. For some, this will be straightforward. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/look-beyond-a-silver-bullet-train-for-stimulus-136834">Look beyond a silver bullet train for stimulus</a>
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</em>
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<p>The government already plays a large role in the education industry. Universities could have their funding boosted to make up for the shortfall of international students, and domestic students should be encouraged to enrol in virtual courses to improve their skills.</p>
<p>For some other service industries, the government should extend JobKeeper to provide continuing assistance after it is due to end in September. Social distancing requirements are likely to limit the operations of businesses such as cinemas and theatres some time. Tourism will also remain depressed as long as our borders remains closed.</p>
<p>Despite the focus on mining and manufacturing in our economic discourse, Australia’s economy is overwhelmingly dominated by services.</p>
<p>If the government wants to stop this recession from turning into a depression, it will have to redirect its policy playbook toward services.</p><img src="https://counter.theconversation.com/content/137994/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Isaac Gross does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>This service sector recession can’t be fought with infrastructure programs. Tour guides are ill-suited to building high-speed trains.Isaac Gross, Lecturer in Economics, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1388282020-05-19T20:00:08Z2020-05-19T20:00:08ZThe pieces of Australia post-coronavirus are falling into place<figure><img src="https://images.theconversation.com/files/335983/original/file-20200519-152327-1w9ug17.jpg?ixlib=rb-1.1.0&rect=780%2C151%2C2938%2C1488&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australia won’t be the same post-coronavirus, but parts of the picture are falling into place.</p>
<p>One concerns our approach to trade. It’ll be a reset, not a rejection. </p>
<p>We will continue to forge strong ties in the Asian Century with members of the Association of Southeast Asian Nations including Indonesia, Malaysia, Thailand and Vietnam as well as Japan, South Korea, China, India and the emerging economies of the region and beyond. </p>
<p>But our approach to China will be different. </p>
<p>China needs food and energy and infrastructure as it moves from being a nation of shippers to a nation of shoppers and its young people want a quality education.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=528&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=528&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=528&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=663&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=663&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335957/original/file-20200519-83352-1px7urm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=663&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Gough Whitlam’s groundbreaking trip to China, 1971.</span>
<span class="attribution"><span class="source">National Archives of Australia</span></span>
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</figure>
<p>Ever since Gough Whitlam’s groundbreaking trip to Communist China in <a href="https://insidestory.org.au/whitlam-in-china/">1971</a> (one year before US President Nixon’s historic trip) and his decision to recognise China on his election in <a href="https://treasury.gov.au/publication/economic-roundup-issue-4-2012/australia-china-not-just-40-years">1972</a>, Australia has been a strong partner of China and a reliable supplier. </p>
<p>Foreign Minister Marise Payne’s call for an <a href="https://mobile.abc.net.au/news/2020-04-19/payne-calls-for-inquiry-china-handling-of-coronavirus-covid-19/12162968">international inquiry</a> into how the COVID-19 took hold has been backed by much of the rest of the world, and ultimately <a href="https://www.abc.net.au/news/2020-05-18/xi-jinping-addresses-wha-agreed-coronavirus-investigation/12260690">by China</a> and is unlikely to get in the way of the relationship.</p>
<p>We will re-think foreign direct investment. It will still be welcome, but from now on any application with geo-political security concerns or state involvement will be considered carefully.</p>
<h2>We will need manufacturing capacity onshore</h2>
<p>We will also need to rethink global supply chains. No nation wants to be caught short of medical technology and equipment in a pandemic. Some production will probably be brought onshore, and more diversified across the region.</p>
<p>We have seen companies such as the mining equipment supplier <a href="https://www.miragenews.com/gekko-systems-makes-switch-from-mining-equipment-to-life-saving-ventilators/">Gekkos Systems</a> and food packaging manufacturer <a href="https://www.miragenews.com/gekko-systems-makes-switch-from-mining-equipment-to-life-saving-ventilators/">Detmold</a> switch to making ventilators and masks, but their nimbleness has also served to put the spotlight on what we can’t do, especially in medicine. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/icu-ventilators-what-they-are-how-they-work-and-why-its-hard-to-make-more-135423">ICU ventilators: what they are, how they work and why it's hard to make more</a>
</strong>
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<hr>
<p>There will be more room for innovative companies along the lines of <a href="https://www.resmed.com.au/">Resmed</a>, <a href="https://www.csl.com/">CSL</a> and <a href="https://www.cochlear.com/au/en/home">Cochlear</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335964/original/file-20200519-83397-8rqeq8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Mount Olga, Central Australia.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/@karljkhedin">Karl JK Hedin</a></span>
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</figure>
<p>The “tyranny of social distance” means we will need to alter our approach to service industries, at least in the short term. In the case of tourism, provided domestic restrictions are relaxed soon, the fall in international visitors could be partly compensated by an increase in domestic visitors.</p>
<p>Many Australians haven’t yet seen the Olgas, Uluru and Kakadu. Australia doesn’t need to rely on repeat visitors like Broadway does in New York, it can do very well out of once in a lifetime vists. (I was amazed to learn at a recent Tourism Australia conference that Kylie Minogue hadn’t been to Uluru until she fronted an advertising campaign last year.) </p>
<p>Education will also need to change as the labour market changes and different skills are required. Many of the new courses will be online, and the lines between vocational, technical and professional education will become increasingly blurred.</p>
<h2>We’ll trust government more</h2>
<p>For many in the workforce, the coronavirus has accelerated working from home as an option (with huge numbers of workers now equipped with the right technology). </p>
<p>This will continue to reduce congestion and provide more family-friendly working environments.</p>
<p>And it has changed our attitude to our government. During the crisis we looked to our own government rather than the United Nations, the United States, the European Union or the World Health Organisation. We put the usual sniping behind us.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/covid-crisis-has-produced-many-negatives-but-some-positives-too-including-confidence-in-governments-anu-study-138018">COVID crisis has produced many negatives but some positives too, including confidence in governments: ANU study</a>
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<p>If it wants to, our government will be able put the green back in the green and gold. The pause in activity due to COVID-19 and the bushfires will allow rebuilding along green lines, trialling technologies that can be exported longer term. </p>
<p>We’ve had some success with stand-alone power grids, pre-fab rebuilds in regional areas and electric and hydrogen transport infrastructure.</p>
<p>For some time, we won’t be able to rely on the traditional holy trinity of increased immigration, ever-increasing house prices and rising commodity prices to boost the economy (allowing investors to simply put their money in blue chips and red bricks, big stocks and property). </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/further-to-fall-harder-to-rise-australia-must-outperform-to-come-out-even-from-covid-19-138802">Further to fall, harder to rise: Australia must outperform to come out even from COVID-19</a>
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<p>But we will have the opportunity in invest in our existing workforce and take advantage of the changes in work patterns and lifestyles the crisis has given us.</p>
<p>As we did in the global financial crisis, so far we have done relatively well on both the public health and economic fronts. We can set ourselves up to respond even better to the other crises that will come this way this century, be they trade wars, geopolitics, an environment catastrophe or even (god forbid) another pandemic.</p><img src="https://counter.theconversation.com/content/138828/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Harcourt does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We will trade, but take more account of our interests than before, and we will trust government more.Tim Harcourt, J.W. Nevile Fellow in Economics and host of The Airport Economist, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1375352020-05-18T14:04:45Z2020-05-18T14:04:45ZHow manufacturers can survive this period of radical change – move into services<figure><img src="https://images.theconversation.com/files/335034/original/file-20200514-77267-1m6mtf9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Looking forward.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/manager-engineer-check-control-automation-robot-1104780941">Shutterstock</a></span></figcaption></figure><p>Change, <a href="https://psycnet.apa.org/record/1986-02689-001">a 1985 paper</a> argued, can be characterised as a “punctuated equilibrium”: long periods of relative calm and small incremental alterations that are interrupted by brief, but radical, seismic shifts. COVID-19 means that we are now living through one of those revolutionary moments.</p>
<p>But that also means that there is an opportunity to look at things in a new way. For the past 20 years, we’ve been conducting <a href="https://www.advancedservicesgroup.co.uk/research">research</a> and advising manufacturers to compete through services – activities aimed at solving customers’ problems – rather than simply just pushing boxes out of the factory. </p>
<p>And our reasons are simple: services are good for <a href="https://www.tandfonline.com/doi/abs/10.1080/09537287.2015.1033490">business</a>, good for the <a href="https://www.sciencedirect.com/science/article/pii/S0959652613008135#bib142">economy and environment</a>, and good for <a href="https://www.sciencedirect.com/science/article/pii/S221042241730134X?casa_token=mLdBc4yiDjwAAAAA:IPC0ppzFEY67H_1V7BjtLzSJ3JmLazk9XVJ_wWvfH7Gdvls7osB8DimC8Rd6H3oMkgeTkbavfr8#bib0145">society</a>. Now accounting for <a href="https://commonslibrary.parliament.uk/research-briefings/sn02787/">80%</a> of the UK’s economic output, services <a href="https://www.ons.gov.uk/economy/grossdomesticproductgdp">have grown by 30%</a> over the past 20 years. By comparison, gross domestic product (GDP) generated from selling products has contracted – a trend that is being replicated in every developed economy across the world.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/will-services-be-the-saviour-of-manufacturing-70081">Will services be the saviour of manufacturing?</a>
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<p>But it has been a slow and sometimes painful journey – “What is this thing called <a href="https://theconversation.com/will-services-be-the-saviour-of-manufacturing-70081">servitization</a>,” we are asked. “And how do you spell it?!” Up until now, change in this field, like in so many others, has been evolutionary, somewhat <a href="https://www.emerald.com/insight/content/doi/10.1108/IJOPM-06-2015-0312/full/html">incremental and exploratory</a>. But then arrives a global pandemic that shatters the equilibrium and stimulates radical innovation.</p>
<p>These are challenging times, and it’s important not to make light of the struggles facing the global economy. Business activity is currently polarised around sector and geography. On the one hand are manufacturers who support the food and health sectors and have never been busier. On the other are those businesses linked to the <a href="https://theconversation.com/what-future-do-airlines-have-three-experts-discuss-135365">aerospace</a>, <a href="https://www.theguardian.com/business/live/2020/may/05/uk-car-sales-tumble-services-pmi-recession-covid-19-business-live">automotive</a>, and <a href="https://theconversation.com/oil-price-futures-markets-warn-it-wont-recover-after-coronavirus-137556">oil</a> and gas industries which are being forced to mothball facilities and lay off staff in their tens of thousands.</p>
<p>For some, the implications are so severe that they may not survive. Even those that are doing well are having to deal with a reduced workforce, social distancing in the workplace, and the economic fallout of customers being unable to pay their bills.</p>
<h2>Disrupting the old norms</h2>
<p>How appealing the old norms may now seem. Until just a few months ago, most executives within manufacturing organisations had a rather passive, established view of services. For us, it was frustrating, but comfortingly familiar.</p>
<p>We could work with these manufacturers to help them better understand the value of services, influence key decision-makers and then hopefully get a chance to support their innovation of new business models, technologies and organisational structures. But we often experienced an equilibrium – the harder we helped manufacturing executives to push for more services, the harder the system pushed back. Now, however, that equilibrium is being disrupted.</p>
<p>Take <a href="https://www.advancedservicesgroup.co.uk/product-page/performance-advisory-services-whitepaper">performance advisory services</a>. These are services that allow manufacturers to use digital technologies to gain insight into how customers use their products, and then offer data and/or intelligence back to that customer on how to gain more value from those products.</p>
<p>An example of this type of service is <a href="https://www.siemens-logistics.com/en/press-media/press-releases/siemens-increases-the-efficiency-and-service-life-of-baggage-handling-systems-with-service-4-0">Siemens’ monitoring of the condition of airport baggage carts</a>. The company gathers acoustic and vibration data from rail-mounted luggage carts around the airport and uses this data to assess the likelihood of breakdowns before they happen.</p>
<p>Breakdowns cost time and money. So spotting potential breakdowns in advance saves airport operators the penalties that must be paid when luggage isn’t loaded onto flights on time, and improves the passenger experience through the punctual delivery of baggage.</p>
<p>We have seen a wealth of technically excellent digital systems like this. Most, however, have so far failed to be commercially viable and manufacturers have been reluctant to invest in and push them to customers. But in the current climate, that may change. </p>
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<img alt="" src="https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335032/original/file-20200514-77235-1rbgv1r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Manufacturers need to do more than just push boxes out of factories.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/box-on-conveyor-roller-3d-rendering-514897444">Shutterstock</a></span>
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<p>As well as opening up a huge new market opportunity, these services could be far more profitable than simply selling the products themselves. Such services can also develop enviable intimacy with and <a href="https://www.sciencedirect.com/science/article/pii/S0019850107001575?casa_token=5kJh0atGYXYAAAAA:OVt4cVF7ysPjIUQnLbjIpTtaKSTd4KT31XBZ2Py03jmXEmGyftb-uNak3wXm4I-Bt_WOkEQU8fs">loyalty from customers</a> as the provider is able to address their customers’ demands and problems much more quickly and effectively.</p>
<p>And now times are changing, the economic potential of services is becoming more visible. Indeed, remote support and performance advisory services – helpdesks, remote support for breakdowns, digital installations – provide obvious solutions in an age of social distancing, remote working and lockdowns.</p>
<p>Customers either want remote advice on how to fix problems themselves, or they want the manufacturer to remotely fix and upgrade their equipment. It’s not all about technology, of course – customers still value speaking to a person, just not face to face. But manufacturers no longer need to gamble as much on selling these new systems; customers actively are seeking them. Both parties are starting to look at the bigger picture, and services are proving vitally important to both.</p>
<h2>Accelerated change</h2>
<p>For some time yet, change will be accelerated and hastened. The end of this period of disruption will bring a new set of norms, and it’s beyond belief that we will return to the days of simply shifting boxes. At the very least, business plans will need to include how to deal with disruption – whether it’s related to health, the economy or the environment.</p>
<p>The opportunities that this creates for services are potentially dramatic. Services are in the midst of radical change and, of course, we all look forward to returning to those long periods of relative calm. However, in so many ways, things will never be the same. Business models for manufacturers will have been disrupted, and there will be new and different conversations about the value of services. These business models have the potential to deliver huge value, and a level of resilience that we may never see again for production-based ways of competing.</p><img src="https://counter.theconversation.com/content/137535/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Professor Tim Baines is the Executive Director of the Advanced Services Group at Aston Business School. He receives funding from industry, EPSRC, ESRC and InnovateUK. </span></em></p><p class="fine-print"><em><span>Ali Ziaee Bigdeli receives funding from the Economic and Social Research Council (ESRC), Engineering and Physical Sciences Research Council (EPSRC) and Innovate UK. </span></em></p>COVID-19 is forcing us to look at business differently.Tim Baines, Director of The Advanced Services Group, Aston UniversityAli Ziaee Bigdeli, Senior Lecturer in Industrial Services Innovation, Aston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1350292020-03-31T02:14:32Z2020-03-31T02:14:32ZWhat actually are ‘essential services’ and who decides?<p>The Morrison government <a href="https://www.abc.net.au/news/2020-03-25/scott-morrison-alll-restrictions/12087112">keeps using the word</a> “essential” to describe <a href="https://www.sbs.com.au/news/who-is-deemed-an-essential-worker-under-australia-s-covid-19-rules">employees</a>, <a href="https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert/how-to-protect-yourself-and-others-from-coronavirus-covid-19/limits-on-public-gatherings-for-coronavirus-covid-19">public gatherings</a>, <a href="https://www.broadsheet.com.au/national/city-file/article/heres-list-what-are-considered-essential-and-non-essential-businesses-according-government">services and businesses</a> that are still allowed and not restricted as it tries to reduce the spread of the coronavirus.</p>
<p>But what is essential, and who gets to decide? </p>
<p>By its very <a href="https://www.merriam-webster.com/dictionary/essential">definition</a>, essential means “something necessary, indispensable, or unavoidable”.</p>
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<a href="https://theconversation.com/australias-130-billion-jobkeeper-payment-what-the-experts-think-135043">Australia's $130 billion JobKeeper payment: what the experts think</a>
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<p>When it comes to dealing with the COVID-19 pandemic, there are no recent precedents for governments. There is no pre-determined list in place on what is an essential service. Instead, “essential” appears a moving beast that is constantly evolving and that can be confusing.</p>
<h2>Confused messages</h2>
<p>On March 22 the Victorian premier Daniel Andrews <a href="https://www.premier.vic.gov.au/statement-from-the-premier-32/">called</a> for “a shutdown of all non-essential activity” within 48 hours. Supermarkets, banks and pharmacies were some of the things he said were essential but he did not provide an exhaustive list of what was considered an essential service.</p>
<p>Naturally confusion reigned. <a href="https://www.abc.net.au/news/2020-03-27/coronavirus-businesses-that-dont-want-to-open/12094470">For example</a>, in the rural Victorian town of Ballan, some stores closed while others remained open.</p>
<p>We’ve now seen <a href="https://www.businessinsider.com.au/coronavirus-retail-shutdowns-2020-3">a number of retailers</a> decide to voluntarily shutter stores for the safety of their workers and the public, considering their businesses “non-essential”.</p>
<p>On Sunday, Prime Minister Scott Morrison said a meeting of the national cabinet had agreed to <a href="https://theconversation.com/public-gatherings-restricted-to-two-people-and-all-foreign-investment-proposals-scrutinised-in-new-coronavirus-measures-135000">a raft of new restrictions</a>, such as <a href="https://www.pm.gov.au/media/press-conference-australian-parliament-house-act-13">limiting</a> “shopping for what you need, food and other essential supplies”.</p>
<p>But he also described his wife’s recent purchase of a number of jigsaw puzzles for the family as “absolutely essential”. While toy and hobby retailers may find comfort in this statement, in reality such businesses may not be considered “essential”.</p>
<h2>Guns and pastries, essential?</h2>
<p>There are differences too overseas in what people consider essential as part of any COVID-19 restrictions.</p>
<p>In the United States, <a href="https://www.kunc.org/post/dhs-advises-states-gun-industry-should-be-considered-essential">it’s recommended</a> employees of gun stores and gun manufacturers should be seen as “essential” workers, according to a <a href="https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce">memo</a> from the Department of Homeland Security.</p>
<p>While in Europe, “necessities” <a href="https://www.wsj.com/articles/necessities-in-europe-belgian-fries-french-baguettes-and-dutch-cannabis-11585160745">are said</a> to include Belgian Fries, French Baguettes and Dutch Cannabis. In France, it’s also shops specialising in pastries, wine and cheese <a href="https://www.theage.com.au/world/north-america/what-s-essential-france-has-pastry-wine-while-us-has-golf-guns-and-ganja-20200329-p54f08.html">reportedly declared</a> essential businesses.</p>
<p>In Ireland, <a href="https://www.rte.ie/news/coronavirus/2020/0328/1127041-list-essential-jobs/">reports say</a> the government there has issued a detailed list of what it considers “essential workers”. As for <a href="https://www.rte.ie/news/2020/0328/1126956-essential-retailers-ireland/">essential retailers</a>, they include pharmacies, fuel stations and pet stores, but not opticians, motor repair and bicycle repair outlets.</p>
<h2>The essential essentials</h2>
<p>Here in Australia there is <a href="https://www.abc.net.au/news/2020-03-25/scott-morrison-alll-restrictions/12087112">broad agreement</a> supermarkets, service stations, allied health (pharmacy, chiropractic, physiotherapy, psychology, dental) and banks are essential business and services.</p>
<p>Similarly freight, logistics and home delivery are also considered essential. Australia Post <a href="https://auspost.com.au/about-us/news-media/important-updates/coronavirus">says</a> posties and delivery drivers continue but <a href="https://auspost.com.au/about-us/news-media/important-updates/coronavirus/coronavirus-domestic-updates#location">some posts offices are temporarily closed</a>.</p>
<p>Some bottle shops can stay open but many are now <a href="https://www.news.com.au/lifestyle/health/health-problems/australian-liquor-stores-enforcing-new-voluntary-purchasing-limits/news-story/59e7a21087c95cb98e3a040affee89d9">imposing restrictions</a> on how much people can buy.</p>
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<p>The government has moved to progressively add more business, services and activities to its “non-essential services” <a href="https://business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/restrictions-on-non-essential-services">list</a>.</p>
<p>This includes cafés, food courts, pubs, licensed clubs (sports clubs), bars, beauty and personal care services, entertainment venues, leisure and recreation (gyms, theme parks), galleries, museums and libraries.</p>
<p>Some of these entities do have exceptions. A café can remain open for take-away only. A hairdresser or barber can trade if they comply with the one person per four square-metre rule.</p>
<p>Others remain convoluted, such as <a href="https://business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/restrictions-on-non-essential-services">outdoor and indoor markets</a> (farmers markets), which are a decision for each state and territory.</p>
<h2>In and out of work</h2>
<p>In reality, no worker should ever be considered, or consider themselves, as “non-essential”.</p>
<p>But due to how the restrictions have been broadly applied, some workers in one industry may now find themselves out of a job, while others in that same industry remain fully employed.</p>
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<strong>
Read more:
<a href="https://theconversation.com/1-500-a-fortnight-jobkeeper-wage-subsidy-in-massive-130-billion-program-135049">$1,500 a fortnight JobKeeper wage subsidy in massive $130 billion program</a>
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<p>Take for example chefs. Due to bans on restaurants and licensed clubs, chefs there are being stood down, but chefs inside hotels can continue to cook and provide room service meals.</p>
<p>A barista in a café can still be gainfully employed, as long as they only make take-away coffee, but a barista inside a licensed sports club, is unfortunately stood down.</p>
<h2>Further restrictions and essentials</h2>
<p>While we have seen many businesses reduce their operations and several retailers voluntarily close their doors, <a href="https://www.news.com.au/finance/business/retail/coronavirus-australia-big-name-shops-closing-their-doors-as-social-distancing-hits-retail-industry/news-story/be67da936b12997d19c78ac6d212309a">many are standing by</a> waiting for further announcements to potentially close all “non-essential” services.</p>
<p>What should the government consider before deciding what is and isn’t regarded as essential?</p>
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Read more:
<a href="https://theconversation.com/in-the-time-of-coronavirus-donating-blood-is-more-essential-than-ever-134541">In the time of coronavirus, donating blood is more essential than ever</a>
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<p>Some decisions are easy: we need health workers, police, fire fighters and other emergency services workers, and we need those who maintain services to the public such as food supply, clean water, sewerage and so on.</p>
<p>But we also need those services required to keep these people functioning. The military describe this as tooth to tail ratio: the number of people required to keep any soldier on the battlefield (estimated up to three for every soldier).</p>
<p>In the civilian context this includes those responsible for the supply of consumables, personal protection equipment, transport, power, fuel, computer systems, and someone to look after their families while they do the heavy lifting.</p><img src="https://counter.theconversation.com/content/135029/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It’s hard to keep up with what’s regarded as essential and non-essential services.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/817032017-07-28T23:22:21Z2017-07-28T23:22:21ZThe government is backing the wrong industries, as our economy changes: Productivity Commission<p>The Australian government is still protecting industries that employ a small number of people. This is while the largest employer, the services sector, is subject to the largest tariffs, a recent Productivity Commission report demonstrates. </p>
<p>As a whole, manufacturing still receives 77% of net assistance, largely due to the remaining small levels of tariff assistance, plus some budget measures, according to the report. </p>
<p>“Input tariffs” increase the costs of imported goods and services that go into making things. This makes a business’ activities more expensive for the consumer. And even though the services sector accounts for around 85% of employment, current government policy is penalising this sector, which has the best prospects for future growth.</p>
<p>However, as the report states, it’s the construction industry that is most affected by input tariffs (A$1.5 billion worse off), followed by property and real estate (A$337 million), then accommodation and food (A$294 million). All of these sectors are labour intensive and employ substantial numbers of people, yet are forced to pay unnecessary tariff costs. </p>
<p>Despite all of this, the government is still protecting primary industries such as horticulture, sheep, beef and grains, and in the manufacturing sector in food and metal production, wood pulp and oil and chemicals. All of these latter industries are basic supply or processing industries, that provide inputs into other industries, but not usually the final products.</p>
<p>Tariffs against foreign goods are reducing and now only provide modest assistance to a few industry sectors. The report says this is worth A$4.6 million to manufacturing, and within that sector food and beverages, metal fabrication, wood and paper petroleum and chemicals enjoy the most protection. Together these industries provide a relatively small proportion of total employment (around 7% or just under 1 million employees). </p>
<p>The popular image of our government protecting the motor vehicle and component industries seems to be less true according to these latest statistics.</p>
<p>In terms of budget assistance from the government, it’s not cars but finance and insurance services that benefit most from the public purse followed by sheep, cattle and grain industries. Vehicle production now receives less than half the budgetary support it received eight years ago – down to approximately A$290 million from A$600 million in 2008-09. The government has given up on the motor vehicle industry and its capacity to provide jobs into the future.</p>
<p>More particularly, the Productivity Commission is critical of governmental assistance to the Spencer Gulf industries in South Australia and to the bail-outs for the Arrium steel works in Whyalla, in the same state, which it considers wasteful and distortionary. Arrium went into voluntary administration before an overseas buyer was procured. </p>
<p>The commission is also hostile to green energy production and storage and to the politically sensitive Northern Australian Infrastructure Facility, which it considers a pork-barrelling exercise open to political pressure. It says this facility is likely to fund non-available projects, that will sit on the public books for years, and this is a misapplication of investment resources. </p>
<p>Finally the wrath of the Commission is piqued by the re-regulation of the sugar industry (another declining industry in employment terms) and especially at the granting of charity status to the main marketing arm, Queensland Sugar Ltd. This body must be one of the last remaining marketing monopolies in the primary industries.</p>
<p>Governments will have to look at winding back the remaining (smallish) tariffs affecting domestic service industry sectors – especially those affecting construction supplies, retail and property, accommodation and food. </p>
<p>These impacts flow into local costs that are making Australia a more expensive place to consume or do business both for Australians and overseas visitors.</p><img src="https://counter.theconversation.com/content/81703/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Wanna does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Under current government policy we are penalising the sector of the economy where there is the largest proportion of existing employment and the best prospects for future growth.John Wanna, Sir John Bunting Chair of Public Administration, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/814642017-07-25T15:25:14Z2017-07-25T15:25:14ZDo you expect service with a smile? There’s a dark side to putting on a happy face<figure><img src="https://images.theconversation.com/files/179451/original/file-20170724-11666-o2mu87.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">I hope they can't tell I just smashed a plate in rage.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/service-smile-35172220?src=DSaHO103vsi8qmWLbcZCbw-1-40">By Golden Pixels LLC/Shutterstock</a></span></figcaption></figure><p>As I was walking through the <a href="https://www.vam.ac.uk/">V&A museum</a> in London a few days ago, two statues immediately grabbed my attention. It was Heraclitus and Democritus, a couple of Greek thinkers known as the “weeping and laughing philosophers”. Heraclitus got his name from being melancholic and sad, whereas Democritus always wore a mask of cheerfulness.</p>
<p>Humans are, and always have been, highly sensitive to the emotional expressions of others. Unsurprisingly, studies have shown that <a href="http://www.jstor.org/stable/1129231?seq=1#page_scan_tab_contents">we much prefer people who appear happy</a> to those who seem sad or neutral. But what is the emotional cost of being like Democritus, always putting on a smile? Is it fair to ask people to do it on the job? We have just reviewed the evidence on the topic – and the findings are concerning. </p>
<p>The reason we like a happy face so much is because positive emotions in others immediately boost our own mental state. For example, <a href="https://www.ncbi.nlm.nih.gov/pubmed/25750481">a recent study</a> showed that in speed dating, people who appeared positive elicited more uplifting emotions in others and were more desirable for a second date.</p>
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<img alt="" src="https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=458&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=458&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=458&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=575&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=575&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179457/original/file-20170724-21564-tm5ukr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=575&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Fresco of Heraclitus and Democritus from 1477.</span>
<span class="attribution"><span class="source">Donato Bramante</span></span>
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<p>But what are the emotional consequences of trying to seem happy in order to please others? Pioneering work by Arlie Hochschild divided such “emotional labour” <a href="http://atgstg01.pineforge.com/upm-data/13293_Chapter4_Web_Byte_Arlie_Russell_Hochschild.pdf">into two varieties</a>: deep acting and surface acting. We use surface acting when we adjust facial expressions and body gestures without actually changing our emotional state – for example putting on a smile without being happy. </p>
<p>Deep acting, on the other hand, is when we try to change how we feel by thinking of something that stirs up desirable feelings or reduces the significance of a negative experience. You may, for example, think about an upcoming holiday when dealing with a difficult client or identify something about them that you like. </p>
<p>Both techniques can help us develop better relationships at home and at work to some extent, but, overall, deep acting helps to exert a more genuine feeling. Indeed, <a href="https://www.ncbi.nlm.nih.gov/pubmed/25384203">a recent study</a> found that waiters engaged in deep acting tended to get more tips than others. </p>
<h2>Heavy price for workers</h2>
<p>Service sector employees clearly experience pressure to perform emotional work – suppressing or amplifying particular emotions to make clients happy and encourage them to come back. Most empirical studies on emotional labour have discovered negative effects. People performing surface acting “put on a mask”, which creates an unhealthy inner conflict between expressed and felt emotions. A review of 95 studies in 2011 demonstrated that using surface acting <a href="https://www.ncbi.nlm.nih.gov/pubmed/21728441">is linked to</a> emotional exhaustion, strain, reduced job satisfaction and poorer attachment to the employer organisation. It also creates psychosomatic problems such as trouble sleeping, headaches and chest pain.</p>
<p>Deep acting, on the other hand, was linked to some positive outcomes – such as greater personal accomplishment, customer satisfaction and attachment to the employer. This is probably because it helps to exert more authentic emotions, which is appreciated by costumers and coworkers. It can also help to <a href="https://www.ncbi.nlm.nih.gov/pubmed/21728441">enable more rewarding social interactions</a>. However, it’s not all good. Deep acting was also linked to greater emotional exhaustion and more psychosomatic complaints. Despite conflicting arguments among researchers, it seems that both surface and deep acting can be harmful for an employee. </p>
<p>Consider the bigger picture. If emotional labour exhausts us and leads to a pile up of stress and strain, it could have a negative impact on our relationships. Some theories propose that willpower and self-regulation depend on a limited pool of mental resources that can be depleted. And it could be argued that repeated emotional labour uses up these resources. As a consequence, instead of acting nice with others, the slightest trigger can explode into aggressive reactions. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179595/original/file-20170725-26586-18fn6m2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">We all know the feeling.</span>
<span class="attribution"><span class="source">Peshkova/Shutterstock</span></span>
</figcaption>
</figure>
<p>For the last decade I have done research in the field of workplace bullying. I am aware that workplace aggression <a href="https://www.researchgate.net/publication/270571082_An_Individual_Psychology_Approach_to_Underlying_Factors_of_Workplace_Bullying">may be triggered by stress</a>. In stressful circumstances we become more defensive, sensitive and, hence, more likely to act hostile. And given that emotional labour creates stress and strain, it would make sense that it could also trigger aggression. </p>
<p>My colleague <a href="http://www.bbk.ac.uk/orgpsych/research/phd/asta-medisauskaite">Asta Medisauskaite</a> and I decided to find out. As a starting point, we performed a systematic review of existing research papers linking emotional labour and aggression towards others at work. We reviewed 12 recent studies (most were published in 2015 and 2016) which looked specifically at emotional labour and dysfunctional workplace relationships. </p>
<p>Our review, not yet published but <a href="https://sites.grenadine.co/sites/mcidublin/en/eawop-2017/schedule/1068/Sa-OR-S111-4+-+Emotional+Labour+And+Negative+Workplace+Relationships%3A+A+Systematic+Literature+Review">presented at the recent congress</a> of the European Association of Work and Organisational Psychology, demonstrates that in most cases surface acting was linked to aggressive behaviour towards customers and colleagues at work. Deep acting was linked to aggression toward coworkers in one study. The acts of aggression were reported by the participants themselves in some cases and by colleagues or supervisors in others.</p>
<p>In the future we wish to see whether gender, cultural background, training and socialisation in organisations affect emotional labour and relationships at work. As a second step we are planning to implement a qualitative study, interviewing service sector employees. In addition, we are looking for ways to develop a joint intervention project with theatre actors and directors, transferring stage-acting techniques to service sector organisations. </p>
<p>For the time being, while we are aware that emotional labour can give a leg up for an organisation, in reality it may actually impede performance. If we accept that we all have an inner Heraclitus that needs to shine through on occasion, we may be able to reduce stress and aggression in the workplace – ultimately making it a happier and more productive place.</p><img src="https://counter.theconversation.com/content/81464/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Milda Perminiene does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A review of the research suggests
that pressure to put on a happy face could make us more aggressive.Milda Perminiene, Senior lecturer in occupational psychology, University of East LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/793922017-06-19T15:33:03Z2017-06-19T15:33:03ZBrexit and weak government: a drama lesson from the Greek economy<figure><img src="https://images.theconversation.com/files/174471/original/file-20170619-28851-131f99q.jpg?ixlib=rb-1.1.0&rect=67%2C58%2C2431%2C1571&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/ancient-greek-drama-mask-162222365?src=St5kBXBp6hllucBSRo8ocw-1-0">EMstudio/Shutterstock</a></span></figcaption></figure><p>The UK is not the first country to stand on the brink of leaving the EU. It may enjoy a far bigger and more productive economy than that of Greece, but there are alarming structural similarities between the two economies that can’t be ignored. Just like the threat of Grexit, Brexit is predicted to hurt the UK economy. And now, after an indecisive election that weakened the government’s ability to govern, another similarity with troubled Greece is added. A critical one. </p>
<p>Chancellor Philip Hammond insists that the <a href="http://news.sky.com/story/uk-economic-growth-slows-to-03-ahead-of-general-election-10853963">UK economy is “resilient”</a>. But look closer and there are striking similarities with Greece, a country hit hard by recession. </p>
<p>Both enjoyed debt-fuelled prosperity. UK government debt rose <a href="https://www.google.co.uk/search?q=greek+debt+to+gdp&oq=Greek+debt+to+&aqs=chrome.1.69i57j0l5.3063j0j8&sourceid=chrome&ie=UTF-8">even more aggressively</a> than <a href="https://www.google.co.uk/search?q=UK+debt+to+gdp&oq=UK+debt+to+gdp&aqs=chrome..69i57j0l5.2615j0j8&sourceid=chrome&ie=UTF-8">its Greek counterpart</a>. Successive governments in Greece ran deficits for many years. They were committed to public services such as free healthcare and free education. Both countries maintain an expensive army, a large civil service and have spent billions to host Olympic games. The Greek government recently managed <a href="http://uk.reuters.com/article/uk-eurozone-greece-economy-analysis-idUKKBN1801AL">to reign in its deficits</a> and currently experiences a structural surplus in its budget. The UK <a href="http://www.telegraph.co.uk/business/2017/05/23/eurozone-fails-reach-greece-debt-deal-investors-eye-uk-public/">is still waiting</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174478/original/file-20170619-12439-12a110q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Mixed blessing.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/athens-greece-october-2-2013-white-195424763?src=PbwW-_QVgA0u4ib3QmUscw-1-14">Ververidis Vasilis/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Industry and property</h2>
<p>Both countries saw industry decline in the 1980s, sparking greater reliance on the service sector for employment and tax revenues. In Britain, the service sector now <a href="http://www.bbc.co.uk/news/business-39743129">accounts for 78%</a> of GDP; in Greece <a href="http://www.greeka.com/greece-economy.htm">it is 85%</a>. Central to the Greek economy is tourism, the financial sector and real estate. It’s pretty much the same for Britain but in a different order. </p>
<p>The UK and Greece also share a <a href="https://www.theguardian.com/money/2016/jan/14/why-are-brits-so-obsessed-with-buying-their-own-homes">culture of home ownership</a>, boosted by cheap money, which has made real estate critical <a href="https://www.nytimes.com/2016/11/02/opinion/in-greece-property-is-debt.html?_r=0">for both countries</a>. The sharp fluctuations around the financial crisis made clear the risk of asset price bubbles, but this culture also renders the workforce less mobile and less likely to retrain, contributing to the massive <a href="http://www.telegraph.co.uk/business/2017/03/04/uk-firms-engineers-banks-struggle-fill-skills-shortage/">lack of skills</a> in the UK. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174479/original/file-20170619-12433-jmu4rc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Housing marks the boom and bust.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/greece-syros-island-architecture-inside-main-137171681?src=x3D_UFxZWyZHqvGUeBKCyA-2-8">Korpithas/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Tied hands</h2>
<p>Britain is in a precarious situation as it <a href="https://www.theguardian.com/politics/2017/jun/19/brexit-talks-david-davis-michel-barnier-brussels-uk-eu">begins Brexit negotiations</a> with the EU. Right now, Brexit means only uncertainty in the business world and uncertainty is a direct threat to the most lucrative industry in the country: <a href="http://pensionrights.org.uk/economists-gloomy-on-prospects-for-2017/">the financial sector</a>. The danger is that a significant part of this industry <a href="http://www.independent.co.uk/news/world/europe/paris-business-la-defense-launch-campaign-uk-companies-brexit-a7367596.html">will be encouraged</a> or <a href="http://www.independent.co.uk/news/business/news/brexit-latest-news-eu-london-clearing-business-euro-derivatives-commission-plans-european-union-a7787186.html">even strong-armed</a> by the UK’s former EU partners to migrate to competitor financial cities <a href="https://theconversation.com/ireland-is-in-prime-position-to-profit-from-brexit-relocations-77876?sr=1">such as Dublin</a>, Paris and Frankfurt. Also at risk is Britain’s role as a gateway for hundreds of billions of euros of <a href="https://theconversation.com/how-brexit-would-reduce-foreign-investment-in-the-uk-and-why-that-matters-57909">foreign direct investment</a> into the EU, a 500m-strong, and particularly affluent, economic area.</p>
<p>And just like the Greek governments at the beginning of the Greek drama, who were bound by the decisions of the European Central Bank, UK governments have their hands tied. Monetary policy has done <a href="https://www.theguardian.com/business/2016/aug/14/monetary-policy-only-short-term-balm-for-uk-economy">pretty much all it can</a>. </p>
<p>The falling pound and rising inflation that followed the Brexit referendum make a <a href="https://www.theguardian.com/business/2017/feb/14/uk-inflation-rises-to-18-spurred-by-weak-pound-and-rising-fuel-costs">devaluation of the pound unproductive</a>. A devaluation would further harm consumers’ disposable income and consumption, and would sound like a distress call to skittish investors. Interest rates are already at rock bottom levels and a further reduction now <a href="http://www.telegraph.co.uk/business/2017/05/12/bank-england-should-have-raised-rates-years-ago-not-late-now/">would have little effect</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174480/original/file-20170619-27202-coohyt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Where the action is. The City of London.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/city-london-sunset-225090037?src=otwwgngeWoRtKUXQUnbp-Q-1-31">ESB Professional/Shutterstock</a></span>
</figcaption>
</figure>
<p>And what about fiscal policy? After all, national debt in the UK stands at what <a href="http://www.bbc.co.uk/news/business-39897498">seems like a paltry 88%</a> of GDP <a href="http://www.oecd-ilibrary.org/economics/country-statistical-profile-greece_20752288-table-grc">compared to Greece’s 181%</a>. Perhaps the UK could finance investments, boost consumption and buy its way out of the Brexit uncertainty and impending recession? Greece tried this from 2004-2009. Nearly a decade later, the mounting debts of that era keep Greece <a href="http://www.newyorker.com/business/currency/why-europe-needs-to-offer-greece-debt-relief">in an economic coma</a>. </p>
<p>And there are more reasons why using fiscal policy would be dangerous for the UK. If the UK wanted to add to its total debt, currently at <a href="http://www.thisismoney.co.uk/money/article-4154144/Britain-s-national-debt-poised-hit-1-7trillion.html">about £1.7 trillion</a>, the international money markets would see the UK stumbling into Brexit talks at a time of political fragility while asking for very large amounts of money to refinance debts and run fiscal policies on top. To compensate for the increased risk, investors will seek higher interest rates. The debts would then become more costly to service, denting the impact of any exuberant fiscal policy and further justifying a sceptical view of the UK from financial markets. Greece will tell you how it ends up if you get the balance wrong. </p>
<h2>Weak and wobbly</h2>
<p>Underlying all of this is the final, and perhaps most crucial similarity. The UK elections on June 8 delivered a paralysed government. A slim majority and the heterogeneity of any coalition government will mean a government that cannot move left or right, forwards or backwards without losing precious support and likely collapsing. </p>
<p>Greek governments in the decade before crisis hit the country provided the perfect example of how the fear of political cost can lead to a disastrous lack of action <a href="http://www.huffingtonpost.com/spyroslykoudis/the-terror-of-political-c_b_8154512.html">on the economy</a>. In addition to deep structural challenges, low productivity and a mountain of debt to repay, the UK now also faces the prospect of a bad deal with the EU, negative business expectations, exhausted monetary and fiscal policy options and grave threats to its lucrative financial sector. </p>
<p>Even an effective and decisive British government with a clear mandate would find it difficult to steer the economy out of harm’s way. For the paralysed and ineffective government that came out of the last UK elections that task may prove impossible: public trust will ebb away, market confidence will dip. Greece taught us not to sail into those headwinds if we can avoid it. The prospect of fresh elections may not be palatable, but it sure beats entrusting the futures of a generation or more to a government barely worth the name.</p><img src="https://counter.theconversation.com/content/79392/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alexander Tziamalis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A warning from Athens about facing political headwinds with a government barely worth the name.Alexander Tziamalis, Senior Lecturer (Associate Professor) in Economics and Consultant, Sheffield Hallam UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/766842017-05-17T04:17:34Z2017-05-17T04:17:34ZOur 24/7 economy and the wealth of nations<p><em><strong>This article is the third in our series, <a href="https://theconversation.com/global/topics/globalisation-under-pressure-38722">Globalisation Under Pressure</a>, on what the changing nature of work means for families and society.</strong></em> </p>
<hr>
<p>We now live in a world where – thanks to information and communication technologies – we are able to produce and distribute goods, services and capital around the globe virtually nonstop. </p>
<p>To keep merchandise and consumers moving across time zones and national borders, employers must increasingly staff workplaces around the clock. And after worldwide <a href="https://www.jstor.org/stable/3184959">labour deregulation during the past decades’ neoliberal reforms</a>, they are now free to hire workers on a casual or on-call basis to reduce labour costs. </p>
<p>This relentless schedule has led prominent sociologist <a href="https://www.russellsage.org/publications/working-247-economy-0">Harriert Presser</a> to call ours the “24/7 economy” – a market that works relentlessly, 24 hours a day and seven days a week.</p>
<h2>Working nonstandard schedules</h2>
<p>Shift work is on the rise in the 24/7 economy. The definition of this phenomenon, which is also known as “nonstandard work schedules”, varies somewhat among scholars and across countries. But it essentially refers to schedules in which the majority of an employee’s work hours fall outside a typical daytime Monday-to-Friday schedule. </p>
<p>This includes evenings, nights, rotating shifts (alternating between day, evening, or night shifts but on a fixed schedule), split shifts, irregular hours and regular weekend work.</p>
<p><a href="https://www.russellsage.org/publications/working-247-economy-0">In the United States</a>, some groups are <a href="https://www.bls.gov/opub/mlr/2007/12/art1full.pdf">more likely</a> to work nonstandard hours than others. Young people, men, those with less education and low-skilled workers have higher incidence of nonstandard hours. As do married couples with young children and single mothers. </p>
<p>Broadly speaking, jobs in the private sector, the service industry and in sales are more likely than other occupations to require nonstandard hours. These include janitors, waitresses, retail workers, nurses and personal-services providers, among other frequent shift workers.</p>
<p>Not coincidentally, these are among <a href="https://www.forbes.com/sites/sageworks/2013/12/29/industries-to-watch-in-2014-the-10-fastest-growing-fields/#1f831aea3d09">the fastest-growing sectors</a> in the US and globally.</p>
<h2>Health, well-being and relationships</h2>
<p>We wanted to know the consequences of the 24/7 economy on workers, family life and children, so we conducted <a href="https://link.springer.com/article/10.1007/s10935-013-0318-z">a comprehensive review</a> of the evidence from 23 quantitative empirical studies spanning three decades (1980-2012) and five countries: the US, Canada, Australia, the United Kingdom and Croatia. </p>
<p>Our research mainly focused on studies that examined the impact of 24/7 economy on children’s development – their social and emotional well-being, physical health, cognitive ability and academic outcomes – but reviewed the evidence on how families, parents and couples are affected as well. </p>
<p>When it comes to adults, <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1479-8425.2010.00432.x/abstract">the evidence</a> that working nonstandard schedules are associated with poor physical and mental health is clear. Physical health problems include increased fatigue, insomnia, stomach and digestive issues, higher cardiovascular risks, being overweight. And the group is also tends to make unhealthy lifestyle choices, such as smoking and drinking alcohol. </p>
<p>Chronic fatigue, sleep deprivation and the resulting stress are all major obstacles to productivity. There are also psychological disturbances associated with sleep deprivation, including adverse effects on memory and reaction time, as well as chronic anxiety and depression. </p>
<p>Such stressors are correlated with a greater risk of workplace accidents among employees on nonstandard schedules.</p>
<p>There is also evidence that shift work can negatively impact <a href="https://link.springer.com/article/10.1007/s10935-013-0318-z">the relationship between parents and couples</a>, and that working evenings or nights is associated with greater depressive symptoms among mothers and fathers. </p>
<p>Overall, people who work nonstandard hours tend to have <a href="https://www.russellsage.org/publications/working-247-economy-0">lower life satisfaction</a> and higher levels of <a href="https://link.springer.com/article/10.1007/s10834-012-9308-1">family conflict and marital instability</a>.</p>
<p>Such schedules do have one notable benefit, though: greater paternal involvement in child rearing. Regardless of whether it is the mother or the father who does shift work, in such families fathers spend more time with children than in those where both parents work standard day schedules. </p>
<p>Whether greater paternal involvement in child rearing might counterbalance some of the negative effects that nonstandard work schedules have on family life is a question that merits further study. </p>
<h2>Impact on children</h2>
<p>What’s clear is that the negative impact of the 24/7 economy clearly trickles down to kids. </p>
<p>Research shows <a href="https://link.springer.com/article/10.1007/s10935-013-0318-z">consistent evidence</a> that nonstandard parental work schedules are linked to adverse developmental outcomes, with children more likely to <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1741-3737.2011.00862.x/abstract">exhibit social and emotional problems or have lower maths and language skills</a>. </p>
<p>These children are also more likely to be overweight or obese, engage in <a href="http://www.sciencedirect.com/science/article/pii/S0190740907001181">risk-taking behaviors</a> (smoking, drinking, using drugs, delinquency and risky sexual activity) and to be at <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2950649/">higher risk for depression</a> compared to those whose parents work standard day schedules. </p>
<p>This impact has been observed throughout child developmental stages, from infancy to adolescence, and <a href="https://link.springer.com/article/10.1007/s10935-013-0318-z">across countries</a>. Our review revealed several pathways that can lead parental nonstandard schedules to correlate with poor childhood outcomes. </p>
<p>When parents show signs of depression, are harsh and insensitive with their children or create a generally unsupportive home environment, for example, those are vectors. So, too, are reduced child-parent interaction and intimacy and a lack of quality time spent doing developmentally important activities such as homework, parent-teacher meetings, sports and music lessons. </p>
<p>Our research also reveals that the 24/7 economy does not uniformly impact families and children. While shift work does have a negative effect on children from different socioeconomic backgrounds, disadvantaged families are hit hardest – that’s kids of low-income or single-parent families – along with families in which one or both parents work full-time on a nonstandard basis.</p>
<h2>National differences</h2>
<p>While the negative impact of the 24/7 economy on families and children has been reported across different developed countries, it is pronounced in some places and muted in others. </p>
<p>Consequences seem most pronounced in the US. Generally speaking, American workers <a href="http://www.pewresearch.org/fact-tank/2016/09/26/u-s-lacks-mandated-paid-parental-leave/">do not benefit from many family-friendly workplace policies</a>, such as flexible arrangements and sick or leave days. This is particularly true in low-wage and low-level jobs, and it impacts most directly those who work outside normal business hours.</p>
<p>In Australia, on the contrary, <a href="http://www.sciencedirect.com/science/article/pii/S0277953616305184">the adverse effect</a> of shift work on adolescent children’s mental health was limited to those who come from single-parent households.</p>
<p>While in the Netherlands, working nonstandard schedules does not seem to have any detrimental impact on <a href="http://www.springer.com/de/book/9789401774000">family well-being</a>. One <a href="http://www.sciencedirect.com/science/article/pii/S0190740916304479">study</a> comparing the UK, the Netherlands and Finland found that nonstandard parental work schedules are associated with less sociable behaviour among children in the UK but not elsewhere. </p>
<p>A plausible explanation for this difference is that in Finland the government provides early childhood education during nonstandard work hours, while the Netherlands offers flexible and reduced work hours. Such policies enable parents to organise child care during work hours, whereas in the UK – which is, like the US, <a href="https://www.theguardian.com/global-development/poverty-matters/2013/apr/16/legacy-margaret-thatcher-neoliberalism">a typical neoliberal state</a> – no such provisions exist. </p>
<p>Understanding country-based differences in how the 24/7 economy impacts families and children is critical. So we are currently developing a larger international comparative project involving scholars from eight countries across three continents to elucidate national variations. </p>
<h2>Help, please</h2>
<p>The past four decades have witnessed the rise and triumph of neoliberalism worldwide. This has gone hand-in-hand with the deregulation of labour and financial markets, privatisation and cutbacks on social spending. </p>
<p>The process culminated in the <a href="http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article">global financial crisis of 2008</a> and persistently rising social inequality. Both have spurred a larger debate on the benefits and disadvantages of neoliberal globalisation.</p>
<p>Even so, the 24/7 economy is likely to continue expanding, particularly since digitalisation worldwide has rendered it increasingly feasible to work outside the office and beyond normal business hours. </p>
<p>It is critical for governments to make policies that support parents, enabling them to balance work and family so that children may grow and flourish. Families are the social and economic fabric of society, and the future prosperity of the world depends on the healthy development of the next generation.</p><img src="https://counter.theconversation.com/content/76684/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jianghong Li is affiliated with Telethon KIDS Institute, The University of Western Australia; Centre for Population Health Research, Faculty of Health Sciences, Curtin University, Perth Western Australia
</span></em></p><p class="fine-print"><em><span>Wen-Jui Han does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ever more people are stuck with shift work in a globalised economy that operates 24 hours a day, seven days a week.Jianghong Li, Senior Research Fellow, WZB Berlin Social Science Center.Wen-Jui Han, Professor and Director of the PhD program of the Silver School of Social Work, New York UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/702812017-01-22T19:10:17Z2017-01-22T19:10:17ZExplainer: what rights do workers have to getting paid in the gig economy?<p><em>The gig economy is offering Australians jobs, but it comes at a cost. These are often temporary positions, where workers are independent and have to take on more risks.</em></p>
<p><em>In our series <a href="https://theconversation.com/au/topics/working-well-in-the-gig-economy-35122">Working Well in the Gig Economy</a> we ask experts how workers can cope in this new environment.</em></p>
<hr>
<p>Most workers want to be paid a fair rate for their work, they want to receive their pay promptly, and they don’t want to lose the opportunity to work in their chosen job for an unfair reason. This is particularly important when workers have invested their own capital in a vehicle or equipment for doing the job. </p>
<p><a href="https://theconversation.com/au/topics/gig-economy-19448">Gig economy</a> workers – who don’t have the same rights to award wages and unfair dismissal protection that regular employees enjoy – face some challenges in securing these needs.</p>
<p>When a worker agrees to provide services on a platform (such as Uber or Airtasker) they will be asked to agree to a contract. The contract they sign (and this may effectively be by clicking ‘Agree’ on a screen) will determine their rights, subject only to the unfair contract terms provisions in the Australian Consumer Law. </p>
<p><a href="http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html">The law provides</a> that unfair terms in standard form small business contracts are void, and cannot be enforced. It lists many ways in which a contract will be unfair. Examples of this are terms that allow one party to vary the price or payment terms, or terminate the contract prematurely.</p>
<p>So it’s important these workers take the time to read the contract, and to look out for terms about pay rates, payment terms, and job security. They need to look out for clauses that allow the platform controller to increase their own commissions or reduce the price of services; and beware of clauses that allow them to cut off their access to the platform without notice or reasons. </p>
<p>I was able to obtain a copy of the standard form contract between the organisation behind Uber (Rasier Pacific VOF) and its Australian drivers in May 2016. The terms of this agreement appear to be similar, if not the same, as those of the UK Uber contract. This type of contract was examined in a <a href="https://www.judiciary.gov.uk/judgments/mr-y-aslam-mr-j-farrar-and-others-v-uber/">well-known case</a> between Uber and drivers, decided on October 12 2016.</p>
<p>The English Tribunal held that a statement in the contract declaring that Uber is not a provider of or agent for transportation was not true, and that Uber did in fact engage its drivers as “workers”, according to the definitions in the UK law. This meant drivers could claim rights to be paid the minimum wage. </p>
<p>However this doesn’t necessarily mean that Australian Uber drivers would be found to be “employees” under the equivalent law - the <a href="https://www.legislation.gov.au/Details/C2016C01108">2009 Australian Fair Work Act</a>. This is because Australian entitlements to national employment standards and modern award conditions apply only to “employees”, defined as having its ordinary meaning under the common law. An extensive body of case law deals with the distinction between an “employee” working under a “contract of service”, and an independent (self-employed) contractor, working under a “contract for services”. </p>
<p>The British decision, disregarding the contract terms, may prove useful in showing that Australian Uber drivers are working under a services contract for the purposes of both the Australian Consumer Law, and also the <a href="http://www.austlii.edu.au/au/legis/cth/num_act/ica2006255/">Independent Contractors Act 2006</a> (which permits review of unfair or harsh contract terms). A services contract is a contract for the performance of work (rather than for the sale of goods or the provision of finance, for example). Uber’s contract attempts to describe itself as a contract for the provision of a telecommunications tool, but the British decision decided that it was a contract for the performance of work. </p>
<p>Some of the terms in the Australian Uber contract are dubious. For example clause 4.4 in the contract allows Uber to change its own percentage commission from fares at any time, without notice. </p>
<p>Another clause, 14.1, allows Uber to change any term of the contract, at any time, without notice. And it can deactivate a driver’s access to the app without notice, if customer ratings fall below an acceptable level. These are likely to be relevantly unfair terms according to Australian Consumer Law. </p>
<p>Of course, Uber and other platform controllers may never seek to rely on these kinds of terms in practice, especially if they want to keep the goodwill of their drivers or workers. But if a working relationship sours for any reason, it’s the worker who is in the weaker position, should the platform controller decide to rely on its contract terms.</p>
<p>The best advice for workers would be to negotiate for fairer terms, but this is likely to be futile. These contracts, like many consumer contracts, are in standard form, and platform controllers have no interest in negotiating individual arrangements. </p>
<p>That’s why collective bargaining through an association of workers is so useful. Hirers may ignore a single worker, but they have an incentive to listen when all of the workers speak in a common voice. The right to bargain collectively is another advantage enjoyed by employees covered by the Fair Work Act, over workers in service contracts. </p>
<p>Individual workers’ access to legal remedies to challenge the fairness of service contracts can be expensive and inconvenient. It’s far better to read contract terms carefully before you sign, and make a realistic assessment of what you can expect to make from the work before investing in a new vehicle or equipment to do the work.</p><img src="https://counter.theconversation.com/content/70281/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joellen Riley Munton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Gig workers need to be aware of their contract terms and band together in order to maintain their working rights and pay.Joellen Riley Munton, Dean and Professor of Labour Law, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/700812016-12-16T12:03:37Z2016-12-16T12:03:37ZWill services be the saviour of manufacturing?<figure><img src="https://images.theconversation.com/files/150315/original/image-20161215-26051-bgmhxk.jpg?ixlib=rb-1.1.0&rect=134%2C103%2C3823%2C2320&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/pic-509065993/stock-photo-jiangxi-china-september-9-2011-jiangxi-nanchang-jiangling-motor-group-company-the-workers-are-assembling-cars-factory-avtotor-carcar-factory-avtotorworkers-assembled-in-china-made-ca.html?src=ZwjqhFHIOlRXmKBKbY3KZA-2-70">humphery / Shutterstock.com</a></span></figcaption></figure><p>The traditional mission for manufacturers was clear-cut: take a combination of people, processes and equipment, and then transform materials into products for sale. Over the past few decades, however, this simple concept has shifted, drawing together two major parts of the economy we always thought of as separate.</p>
<p>For manufacturers seeking customer satisfaction, competitiveness and sustainable revenue, simply making and selling physical products is no longer enough. In the drive to build and protect customer bases and profit lines, services now have a pivotal part to play. The manufacturing sector finds itself transitioning to a new way of doing things: “servitization”.</p>
<p>In simple terms, it is about manufacturers building their revenue streams through services. You will have experienced something like it if you have ever gone for a new car on a <a href="http://www.autoexpress.co.uk/car-news/90794/pcp-personal-contract-purchase-car-deals-explained">Personal Contract Purchase (PCP) contract</a>. It is basically a leasing model, in which the car manufacturers charge their customers based on the estimated mileage for a fixed period, rather than just the price of the asset. Repair and maintenance are usually included in these contracts, meaning that the customers would only need to fill the tank and enjoy the drive. </p>
<p>But servitization goes way beyond that in this new era and, of course, services themselves are not homogeneous. A variety exist – and they differ substantially in their level of risk, level of competition and potential to create competitive advantages.</p>
<h2>Power games</h2>
<p>In industry, debates about servitization almost invariably refer to <a href="http://www.rolls-royce.com/media/press-releases/yr-2012/121030-the-hour.aspx">Power by the Hour</a>, the pioneering engine maintenance solution introduced by Rolls Royce in the early 1960s. It involved extensive changes to processes, structures, technologies and personnel within Rolls Royce and provides a benchmark for others. It also changed the deal with customers from a transactional purchase of equipment towards a ten-year contractual relationship. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/150302/original/image-20161215-13648-1953qix.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Can services be an engine of the manufacturing economy?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/18378305@N00/7426133522/in/photolist-cjdSLS-hFR3Qq-hFQFuN-7JLjrb-hF3B2J-hF4Pri-hAwgvT-dZqEoE-9CXfYP-nEmbDY-i3VxXQ-eo7KH9-f2UGrG-9vDFwo-enx6jP-7JhgrN-jm1d5d-bLsxLt-7Zgydh-9DDuo1-nkxPFg-bnx9Mv-8fLCyH-hE5oza-eXxvGy-9D1t3W-9NGYu8-9CBFye-kMsD3-7JLjKy-pACfmn-nA7hNC-eXxo2s-jic8V7-7APufU-9LBtV2-ojekDp-9CEyKb-eC29G8-bB568d-fM39Ao-qgQcDj-hAwUjo-9D1d1w-ioJfC-b4CR3z-bAuSZC-fCQfSd-7YLgj7-dRaKw4">Can Pac Swire/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
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</figure>
<p>These days there exists a remarkable breadth and depth of different offerings. Some manufacturers may offer an ever greater variety of “intermediate services”, including condition monitoring, maintenance, repair, overhaul and remanufacturing. Some move towards advanced services – such as Power by the Hour. These plans can include penalties if a product fails to perform when in service, or a system of payments structured around product usage all wrapped up in long-term contractual agreements which span up to 15 years.</p>
<p>Other examples include <a href="http://www.alstom.com/Global/US/Resources/Documents/Download%20Centre/Brochure%20-%20TrainLife%20Services.pdf">Alstom’s TrainLife Services</a>. In this, French group Alstom provides the train with a bundle of repair and maintenance services and charges the operators (such as VirginTrains) based on the miles travelled through 15-20 year contracts. <a href="https://www.xerox.co.uk/en-gb/services/managed-print">Xerox’s Print Management</a> system offers a services and copier bundle which charges customers based on the number of papers they have copied or printed, and <a href="http://www.man-tco.co.uk/finance/">MAN’s pay-per-kilometre</a> programme does a similar thing based on the distance its trucks are driven. </p>
<p>Such offerings are widely associated with a wholesale shift in ideas about the very nature of manufacturing. Ultimately, these make the deal more of a partnership than a transaction. </p>
<h2>Momentum</h2>
<p>More and more manufacturing firms are joining in. A few weeks ago, <a href="https://www.genewsroom.com/press-releases/ge-digital-acquires-servicemax-extend-predix-and-analytics-across-field-service">GE Digital announced</a> the acquisition of ServiceMax, a cloud-based field service management company – which, in theory, will enable GE to develop and deliver smart and connected industrial machines more smoothly and quickly than its competitors. </p>
<p>Goodyear <a href="http://www.marketwired.com/press-release/goodyear-launches-new-business-connected-fleet-management-solutions-2178154.htm">has also announced</a> the launch of Goodyear Proactive Solutions. This will aim to use new technologies such as predictive analytics to help truck fleet managers better handle how their vehicles are used. The common thread is that the outcome is not the sale of a product, but capability delivered through the performance of the product.</p>
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<a href="https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=396&fit=crop&dpr=1 600w, https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=396&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=396&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=497&fit=crop&dpr=1 754w, https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=497&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/150304/original/image-20161215-13653-30bt2y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=497&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Purple patch. Brompton bike hire arrives in Birmingham.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/birminghamnewsroom/14865540468/in/photolist-eeMU2G-smAfpw-oDBMgS-oDB38D-oW77C2-oVQt5H-bshgt5-pMkRtW-buQvGd-ecHEYZ-DknC41-eeGcSp-eeGaq4-eeMUCJ-acoCzC-eeMUbs-BWZmgd-Cdqrvn-rUzc1g-wD6rdL-waw3tW-yaDi6H-z7wioc-wM9znZ-xnNp47-L7kpev-HHYU33-GX36PV-Cb8T9o-vSH2UB-fh2m1r">Birmingham News Room/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>Servitization has emerged in business-to-business (B2B) offerings. But the concept is also starting to touch our everyday lives at a business-to-customer (B2C) level. Take Daimler’s <a href="https://www.mercedes-benz.com/en/mercedes-me/">Mercedes Me platform</a> which remotely notifies drivers if the car requires maintenance or repair work. Brompton, the British manufacturer of popular folding bikes, now <a href="https://www.bromptonbikehire.com/">rents the bikes</a> via docks across the UK to provide a more hassle-free option. </p>
<h2>Advantange</h2>
<p>Before it becomes ubiquitous, as it may well do, servitization offers manufacturers a key competitive advantage. Those who embrace the idea should be able to help customers better achieve key strategic aims and, in doing so, offer something their rivals cannot. That in turn should deliver business growth and sustainability for both themselves and their customers. </p>
<p>Manufacturers get long-term contracts, closer relationships with clients, new business opportunities and revenue streams – and an enhanced image alongside that market differentiation. Customers should be able to squeeze out greater value from operations, better predict costs, and find it easier to scale up their operations.</p>
<p>The trend offers a future which will penalise the laggards. More and more technology-focused firms are moving into the product manufacturing space and disrupting their value networks. Take Uber, the ride-sharing tech company which is moving into the long-haul transport business with <a href="https://freight.uber.com/">Uber Freight</a>. This will allow a shipper to directly connect with a truck, challenging the traditional business model: in short, cutting out the middle man and offering real-time pricing. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/150311/original/image-20161215-26045-17asqjb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Branching out. Uber gets trucking.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/pic-312342911/stock-photo-chiangmai-thailand-september-1-2015photo-of-wwwubercom-uber-homepage-on-a-monitor-screen-through-a-magnifying-glass.html?src=AZaFawq_ayCZCaDzlpQ0aw-1-64">GongTo/Shutterstock</a></span>
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<p>Moves such as this create an active network in which manufacturers must be involved. The parts of the network evolve together to improve capabilities, and investments are aligned to create value or improve efficiency. What that means in practice is that a collaborative network is built between distributors, suppliers, technology and customers, which creates a resilient barrier that inhibits the entry of new players.</p>
<p>It is true that manufacturing firms can see an advanced services model as high-risk. The traditional product-based mindset is hard to break out of and realising the full potential of servitization demands innovation of the business model, a willingness to embrace new technology and new skill sets, as well as – ultimately – a wholesale change to the organisational culture. </p>
<p>But it might just be worth it. Manufacturing firms across the globe face a period of socioeconomic uncertainty. In the UK, Brexit is only adding to the challenges from a fragile recovery after the 2008 financial crisis, marked by intense competition from low-cost economies. In such an environment, servitization can offer a defensible long-term strategy that localises value creation and value capture.</p><img src="https://counter.theconversation.com/content/70081/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ali Ziaee Bigdeli is part of an EPSRC funded project (Ref: EP/K014072/1; EP/K14064/1; EP/K14080/1; EP/K14080/2) in partnership with the Advanced Manufacturing Research Centre (AMRC) of Sheffield University. The project focuses on developing applied game technologies to transform the servitisation of mainstream manufacturing companies. </span></em></p>Making products in our new economic age is fast becoming a partnership with customers, not just a transaction.Ali Ziaee Bigdeli, Senior Research Fellow, Aston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/642452016-08-23T13:08:28Z2016-08-23T13:08:28ZDriverless Uber cars are coming to disrupt the sharing economy – but capitalism carries on as usual<p>Uber’s <a href="http://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on">announcement</a> that it will introduce driverless cars in Pittsburgh, US, throws into question the fate of not just the <a href="https://theconversation.com/uk/topics/sharing-economy-7841">“sharing economy”</a>, which Uber helped to make mainstream, but the future of employment in a wider sense too. One thing is for sure, however: though Uber may be changing, the way that it has shifted the way we work is here to stay.</p>
<p>Uber has become virtually synonymous with the idea of new business models. It is so well-known that it has actually given us a new word – “uberisation” – to describe work that is managed via online platforms in the so-called sharing economy. The company is in many ways an emblem of the nimble inventiveness with which capitalism, helped along by technology, manages to survive economic crises, find creative new solutions to old problems <a href="http://monthlyreview.org/2015/01/01/icapitalism-and-the-cybertariat/">and continuously reinvent itself</a>. Using driverless cars is yet another example of this.</p>
<p>Founded in 2009, a year after Airbnb and Taskrabbit, Uber was among the first service companies to spot a way to avoid having to invest a considerable amount in depreciating assets such as fleets of cars, specialist tools or expensive real estate. The solution? To externalise the risk and use other people’s assets. </p>
<p>In the original Uber model, the cost of purchasing and maintaining cars fell on the owner-drivers, not the company. Its attitude to workers was similar. Why invest in your own workforce, with all the liabilities that go along with being an employer, when you could use the services of people who pay for their own training, holidays and pensions and take responsibility for their own downtime? </p>
<p>Online platforms claim that they are not employers – they are just a high-tech interlocutor of supply and demand for services. They make their profits by taking a cut on all transactions. And, with minimal investment, they can expand rapidly into new markets.</p>
<h2>Taking advantage</h2>
<p>One of the reasons Uber attracted so much more public attention than other platforms that provide work on demand (such as Taskrabbit, Handy, Upwork or PeoplePerHour) is that it entered a field – taxi services – where workers were already organised. Taxi drivers in many cities have a long history of forming associations to agree rules and negotiate with public authorities over things like standard fares, the location of ranks <a href="http://www.whosdrivingyou.org/history-repeating-itself">and the conditions for obtaining licenses</a>. This contrasts with people providing services like window cleaning, gardening, childcare or assembling flat-pack furniture, which other platforms provide. </p>
<p>London black cab drivers typically spend around four years learning “the knowledge”, which requires them to know all possible routes through the city and is a <a href="http://www.theknowledgetaxi.co.uk/">condition for a license</a>. So it is not surprising that the entry of Uber into their market provoked storms of protest. The arrival of GPS rendered much of that hard-won knowledge obsolete and threw open the previously well-guarded field of taxi driving to anybody with a car and a smartphone who wanted to make some extra income. And lower prices made private rides affordable to people who, in the past, had seen taking a taxi as an occasional luxury. </p>
<p>But these advantages could not last for ever. Competitors entered the scene. Public authorities <a href="http://www.sfexaminer.com/state-approves-sweeping-new-regulations-uber-lyft-delays-rules-leased-vehicles/">woke up</a> to the need to regulate these new taxi services – what if there was a fatal accident? What if a driver, or a passenger, was assaulted? Who was responsible for insurance? </p>
<p>And drivers started to feel more like exploited workers than carefree entrepreneurs. If Uber was setting the rates and dictating how they should work, then shouldn’t it start taking on the responsibilities of an employer? Uber <a href="http://www.bloomberg.com/news/articles/2015-06-24/uber-case-spotlights-a-challenge-when-is-a-worker-an-employee-">has faced court challenges</a> over this in the both the US and <a href="https://www.theguardian.com/technology/2016/jul/19/uber-drivers-court-tribunal-self-employed-uk-employment-law">the UK</a> over this issue. Some of its US drivers have even set up their <a href="http://www.ibtimes.co.uk/angry-uber-lyft-drivers-launch-own-rival-taxi-app-called-swift-1545756">own co-operative</a> with drivers from Lyft, a similar service, as an alternative.</p>
<h2>Keep calm and carry on</h2>
<p>Meanwhile Uber has become a huge corporation with a global spread and <a href="http://uk.businessinsider.com/report-uber-15-billion-revenue-in-2015-2016-1">revenues of US$1.5 billion in 2015</a>. Its latest attempt to reinvent itself, interestingly, adopts one of the classic industrial strategies from the past for boosting profits – automation. Sidelining its past game plan of making its workers do all the investing, Uber is putting its own money into a new technology: driverless cars. </p>
<p>If the gamble pays off, then this is likely to have several impacts. It will continue to undermine the position of traditional taxi companies by offering a cheaper service (and potentially Uber’s own owner-drivers). But it will also drive out competitors. New entrants to the driverless taxi market will have to invest in fleets of these vehicles. This could enable it to consolidate the near-monopoly it already has in some cities, making the name Uber as synonymous with taxi services as Hoover is with vacuum cleaners and Kleenex with tissues. </p>
<p>If <a href="http://socialistregister.com/index.php/srv/article/view/5712#.V7svL6KrJQU">history can teach us anything</a>, this will not lead to mass unemployment. It might put existing Uber drivers out of work, but this kind of restructuring tends to create new jobs, even as it destroys others. Driverless cars may do to professional drivers what washing machines did to laundry workers. But capitalism, disruptive as ever, carries on as usual.</p>
<p>So if this is the future of Uber, what about the future of uberisation? The evidence is that it is part of a huge trend that is growing inexorably. Across the economy, “work on demand” is becoming a new norm for jobs as varied as supply teachers, agency nurses, supermarket checkout operators and call centre workers. A <a href="http://www.feps-europe.eu/assets/a82bcd12-fb97-43a6-9346-24242695a183/crowd-working-surveypdf.pdf">recent survey</a> of 2,238 people that we carried out at Hertfordshire Business School suggested that 3% of the adult population in Britain works for online platforms “at least weekly” with many more (11%) doing so more occasionally. An estimated <a href="http://www.bbc.co.uk/news/business-35761924">2.5% of employees</a> are on zero hours contracts and <a href="https://www.ons.gov.uk/releases/uklabourmarketstatisticsmay2016">6% are on temporary contracts</a>. The <a href="https://www.ons.gov.uk/releases/uklabourmarketstatisticsmay2016">latest UK government figures</a> show that more than a million people have second jobs and nearly 5m are self employed. </p>
<p>Uber may be changing. But unless there are radical changes in labour and social protection regulation, it looks as if uberisation is here to stay.</p><img src="https://counter.theconversation.com/content/64245/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ursula Huws currently directs research projects which receive funding from The COST Association, the Foundation for European Progressive Studies and UNI-Europa. She is a trustee of the Citizen's Income Trust.</span></em></p>Uber’s introduction of driverless cars is a big change for the company but the changes it has brought to the world of work are here to stay.Ursula Huws, Professor of Labour and Globalisation, University of HertfordshireLicensed as Creative Commons – attribution, no derivatives.