IDEAS home Printed from https://ideas.repec.org/a/inm/orserv/v2y2010i3p136-145.html
   My bibliography  Save this article

Division of Labor between Firms: Business Services, Non-Ownership-Value and the Rise of the Service Economy

Author

Listed:
  • Michael Ehret

    (Nottingham Trent University, Burton Street, NG1 4BU Nottingham, United Kingdom)

  • Jochen Wirtz

    (National University Singapore, 15 Kent Ridge Drive, Singapore 119245)

Abstract

Why have services grown into the dominant sector of developed economies? Our analysis of macroeconomic data shows that business services make the strongest contribution to the rise of the service sector. We integrate three related economic theories of the firm to explain business services in shaping firms, industries and economies. Business service providers relieve their clients from the costs of asset ownership (Property Rights Theory), unlock management capacity (Resource-Based View) and support their clients in navigating their firm's boundaries towards their most valuable business opportunities (Entrepreneurial Theory of the Firm). We show how these theories build on the non-ownership value provided by business services that result from sound division of labor between organizations. We highlight three areas that call for research and provide opportunities for service science: (1) Systematic design of business-models for fostering service performance, (2) the transformation of high-tech-products into service-hubs, and (3) service-driven innovation and the transformation of R&D into a service industry. [ Service Science , ISSN 2164-3962 (print), ISSN 2164-3970 (online), was published by Services Science Global (SSG) from 2009 to 2011 as issues under ISBN 978-1-4276-2090-3.]

Suggested Citation

  • Michael Ehret & Jochen Wirtz, 2010. "Division of Labor between Firms: Business Services, Non-Ownership-Value and the Rise of the Service Economy," Service Science, INFORMS, vol. 2(3), pages 136-145, September.
    • Handle: RePEc:inm:orserv:v:2:y:2010:i:3:p:136-145
    DOI: 10.1287/serv.2.3.136
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/serv.2.3.136
    Download Restriction: no
    File URL: https://libkey.io/10.1287/serv.2.3.136?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orserv:v:2:y:2010:i:3:p:136-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.