ADVERTISEMENTS:
This article provides information about the emergence of ICT is helpful in the growth of service economy:
One of the striking aspects of the convergent of communication and information technologies and the resulting technological revolution is the emergence of the use of these technologies for application in different areas of economic activities with significant implications.
Image Courtesy : cms.clarkslegal.com/Uploads/n_10102013142244776_DSCF2078.JPG
ADVERTISEMENTS:
The claimed benefits these new information and communication technologies are: (i) it improves the quality of life by eliminating the repetitive and dangerous work (ii) it increased efficiency and productivity, through better decision-making and cost effective procedures.
There has been a considerable growth in service economy compared to other economic activities such as agriculture and industry in the past few decades of rapid technological development. This was mainly because the activities related to service economy become less expensive and more convenient to the consumers with the help of new information and communication technologies.
Although service sector was the most important sector to feel the impact of the new information and communication technologies, surveys of international experience clearly shows that the impact of ICTs differs from country to country and sector to sector and the impact is determined to large extent by the way the country uses it.
ADVERTISEMENTS:
It is also evident that the introduction of ICTs demands a fundamental change in the work content. Work that previously required combing perceptions and the use of senses with cognitive processing is now largely dependent on cognitive processing with automation taking over the other elements of the work process.
According to Distributive Trade Statistics in India, Service Sector covers a wide range of economic activities. It includes services related to wholesale and retail sale such as such as hotels and restaurants, real estate, machinery renting and leasing, data processing, advertising, motion pictures, broadcasting, photography repairs and some personal services.
Besides the sectors of trade, hotel and restaurant, transport, storage, communication, real estate and ownership of dwellings, banking and public administration, it also covers the sectors of business services and ‘other services’. Business services include business accounting, software development and data processing, business and management consultancy, advertisement and other business services.
The sector ‘other services’ comprises education, research and scientific services, medical and health services including veterinary services, sanitary services, religious and other community services, recreation and entertainment services and personal services like domestic, laundry, dyeing and dry cleaning and barbers and beauty shops.
If we take it on the basis of performance of the service economy we can see that the rapid employment growth in services sector of several OECD countries over the past decade results from the strong performance of certain market services, notably telecommunications, transport, wholesale and retail trade, finance, insurance and business services. Over the past decade, these services accounted for around 60% of all employment created in the OECD area. Moreover, they are characterised by growing use of productivity- enhancing technologies such as ICTs. Among the services, while the share of telecommunications and business services is 60% the remaining 40% are from community, social and personal services including health and education.
In India as per the data released by Central Statistical Organisation, in the first half of year 2005-2006 there is a spurt in the service sector. Among services, the highest growth was seen in trade, hotels, transport and communication 12%, whereas francing, insurance, real estate and business services grew by 9.9%.
The technological innovations, particularly in the area of ICTs that have underpinned the birth of the information society were sparked in OECD countries. An analysis of economic development of the OECD countries shows among other factors ICTs plays an important role in the transformation of service sector. It is seen that ICTs can help services firms to introduce new business models, develop new applications, improve and re-invent business processes, enhance customer services and raise efficiency throughout the value chain. It also shows much of the ICTs use is in service sector.
With ICTs revolution people can have their bank account balance sent to them by text message, get pensions and benefits paid straight into their bank accounts, and can pay their taxes online. Such ICTs innovations have been embraced widely by organisations in all service sectors as a way of transforming the way they work. There are four main reasons why ICTs can add value to such organisations. It (a) changes transactions, (b) changes interactions (c) enables sharing of information across boundaries, and (d) overcomes spatial constraints.
All these four factors if applied give value added advancements to all economic sectors especially to the service sector. ICTs is also seen as critical to improving the efficiency of transactional services, the back office and the ‘productive time’ of staff. It is seen as vital to offering ‘choice’ of delivery channel – face-to-face, phone or online – and as enabling transformation of long- established working practices, for example by giving social service workers remote access to electronic information, thus enabling them to stay ‘out and about’ and see more people for longer.
ADVERTISEMENTS:
ICTs add value by allowing users to operate within faster, larger and more interactive networks. These lower transaction costs and speed up innovation because people and markets are better connected, whether in sharing knowledge or trading goods. Firms use ICTs to improve efficiency and reduce costs.