”Everybody is in services”
Servicification and trade policy
Emilie Anér
Magnus Rentzhog
Presentation at lunch
seminar: ”Servicification Why free trade in services
matter to manufacturing”
ECIPE, BusinessEurope
and ESF
April 25, 2013
Servicification = more and more services
as inputs and outputs in manufacturing
Increased dependence in the manufacturing industry on
• Purchased service inputs
• In-house service production
• Sales of services integrated into products
• Sales of services alongside products
• Service import and export
…supports competitiveness, productivity and trade
Key figures for manufacturing firms
Costs for services as inputs
Sweden: 25 %
OECD countries: 13-30%
Employees in service-related occupations
EU-12 countries: 40 %
Sweden: 46 %
Services sales in total turnover
Sweden: 26 %
Various MNCs: 25-50% of
total revenue
Added value in manufacturing: 30 % (OECD)
Services needed by Sandvik for effective
supply chain and delivery of goods
Legal services
Accounting, bookkeeping etc.
Taxation services
Medical services
Computer services
Research and
development
Rental/Leasing
Advertising
Market research
Services incidental to
manufacturing
Placement of personnel
Maintenance and repair
Security services
Packaging
Printing, publishing
Design
Building-cleaning
services
Photographic services
Courier services
Logistic services
Postal services
Telecommunications
Audio-Visual services
Educational services
Environmental services
Banking services
Insurances
Health related services
Hotels and restaurants
Travel agency services
Maritime transport –
freight
Inland waterways –
freight
Inland waterways –
freight
Air transport freight/passenger
Road transport –
freight/passenger
Cargo-handling
services
Storage and warehouse
services
Freight transport
agency service
Feeder services
Energy services
Services delivered by Sandvik to the customer
Computer services
Research and
development
Rental/leasing
Maintenance and repair
Management consulting
Technical testing and
analysis services
Services incidental to
manufacturing
Design
Environmental services
Financial services
Logistics
Warehouse services
Motives for servicification in firms
Use of
services
(input)
Servicification as a
response/effect
Servicification as a
strategy
Logistics and transport as a
result of fragmented
production (global value
chains)
IT and management
services in order to increase
efficiency
Ex. Albin Components uses
Ex. Volvo AB imports parts from services to implement lean
production, just-in-time delivery
all over the world
and total quality management
Offered
services
(output)
Recycling services as a result Repairs, upgrades and
of regulatory demands
surveillance services to
prolong the relationship with
Ex. Sandvik Tooling offers
the customer
recycling services as a result of
regulatory demands
Ex. Atlas Copco leases
instead of sells many products,
also offers upgrades and
diagnostic services
Services as enablers in global value
chains
Financial
services
R&D/
Design
Raw
Materials
Logistics
Services
Intermediate
Inputs
Quality Control
Services
Semi
Finished
Goods
Final
Good
Assembly
and
Packaging
Warehouse
Retail/
Delivery
Customer
Service
Marketing
Services
Source: USITC 2011
The GVC of video game Minecraft
• USA
• Germany
• England
• Scotland
• Holland
• Canada
• Japan
Without order of
importance
• Denmark
• Finland
• Sweden
Plus: UN Habitat, and other countries
(”Community”, marketing and ”3rd
Party Servers)
Trade policy implications
Shift towards a ”Goods AND services” mindset for
1. Formulation of trade policy
2. Liberalisation
3. Negotiations
Service import dependency in the
Swedish motor vehicle industry
Input-output tables for Sweden in 2008
Trade policy implications
Shift towards a ”Goods AND services” mindset for
1. Formulation of trade policy
2. Liberalisation
3. Negotiations
Thank you
• Studies available at:
http://www.kommers.se/In-English/
Servicificaiton
”Everybody is in Services”
”At Your Service” [Sanvik case-study]
Services and GVC
”Global Value Chains and Services – An Introduction”
”Minecraft Brick by Brick”