Proceedings of Annual Tokyo Business Research Conference
15 - 16 December 2014, Waseda University, Tokyo, japan, ISBN: 978-1-922069-67-2
The Emergence of the New Service Economy in Public Services:
Transformation of Public Service Delivery by Network and
Digitalization Based Solutions
Pekka Valkama, Ari-Veikko Anttiroiko and Stephen J. Bailey
Public service sectors are in a process of transformation based on technological progress and new
organization models. Technological innovations offer the possibility to use information in new
ways, which allows the digitalization of the services. Furthermore public authorities are finding new
way to unbundle organizational processes and de-composite professional skills.
The study aims to demonstrate theoretical and conceptual for and against arguments, how the
emergence of the new service economy may transform the production and consumption of public
services in way which improves productivity. The focus is on the features and impacts of
networking and digitalisation on public service systems.
The theoretical framework is based on conceptual analyses and constructive dialogues with the
literature. Empirical analyses are based on reviews of selected cases and documented vignettes of
Finnish municipal services.
As digitalization introduces platforms such as government 2.0 and Internet-based procurement
systems and content materials as electronic teaching materials, public authorities can procure
services effectively not only from national but also international private and non-profit
organizations. However, we argue that remarkable productivity improvements may require reengineering of production processes and customer-friendliness in the access points of customers.
Networks are forms of innovative organisation, which are born as a response to needs for
specialisation, knowledge-sharing and resource consolidation. Public authorities can increase
production capacity, divide investment needs and circulate risks via networks such as
subcontracting and offshoring.
The finding demonstrates successful and failure cases of digitalized services and network-based
contracting solutions.
JEL classification: H 44 Public Economics, Publicly Provided Goods: Mixed Markets
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Dr Pekka Valkama, Dr Ari-Veikko Anttiroiko & Professor Stephen J. Bailey, School of Management, University
of Tampere, FI-33014 University of Tampere, Finland, Tel. +358 3 355 111