EUROPEAN PAPERS ON THE NEW WELFARE

Abstracts from The Employment Dilemma and the Future of Work

2. Productive Work in the Service Economy

Up to now and during the course of the Industrial Revolution monetarised2 paid work, mostly in the manufacturing industries, was the key and practically the only fundamental reference for economic development. Even the ‘traditional’ subdivision of the economy in three sectors at the beginning of the Industrial Revolution (agriculture as the previous heart of the economy, manufacturing as the rising segment and services as largely independent and unrelated activities in regard with the former two) is a sign for the concentration on remunerated manufacturing work and the negligence of the service activities that in fact complement products and utilisation systems instead of belonging to an individual and exclusive group of their own.
In the contemporary Service Economy, that is less determined by the mere production of goods than by a number of services revolving around them, we obviously need a different approach.
Not only the easily detectable shift of working population away from the first two sectors towards the service sector documents the change of our economy. It is also the growing dominance of services within the other two sectors that highlights the transformation from the age of industrialisation towards the modern Service Economy. For instance, intrasectoral services of the secondary sector are estimated to have doubled from less than 15% of the overall economy in 1950 to 30% in 1990, accounting for more than half of all jobs within the industry. If these figures are added to the traditionally estimated proportion of the service sector they will account for about 80% of the modern economy in terms of job functions. Only a diminishing part of remunerated work, currently 20% in ‘advanced’ countries, is still linked to strictly manufacturing activities.
Services dominate all economic production sectors, which increasingly depend on research and development, quality control, maintenance, financing, insuring, publicity and distribution, customer services, recycling etc. in order to render the best possible results. The value of a product is no longer strictly related to its production costs but to its performance over a period of time. The ‘sell and forget’ mentality of the era of mass production has withered away. The costs of production are now distributed in time from the very first initiatives at the level of research and development up to the moment of waste disposal and elimination after the utilisation of the products or systems.
This process has stimulated the amount of non-remunerated work as the producers of goods and services try to shift part of the work towards the consumer. The consumption of goods and services is no longer a totally separated activity from the production function. It is more and more inserted into this global production system, particularly at the level of distribution and above all utilisation and finally recycling or disposal. The introduction of self-service restaurants, transferring the ordering and disposing process to the individual consumer instead of a waiter, or the substitution of bank clerk attendance by automated teller machines, demanding a higher usage knowledge of the clients, are just two examples. Alvin Toffler has described this phenomenon as the transformation of the consumer to the ‘prosumer’.
We observe here the reappearance of the value of self-production and self-consumption, that were dismissed by economic thinking in the course of the Industrial Revolution. Precisely because material products have less and less value per se unless they are adequately utilised, the economic value of utilisation and the self-production and self-consumption processes it stimulates require a reintegration of these activities as fully value productive in economic and social terms. Monetarised production is interdependent at a higher degree than ever with the non-monetarised production. The amount of work done for auto- or self-production is meant to increase particularly in relation with the utilisation of complex products, services or systems. As a consequence, these two forms of work became increasingly complementary to the remunerated work in the process of producing ‘performance value’.
This performance value, describing the new productivity of the Service Economy, is measured as the functioning of a product, system or service during a period of time with a minimum of acquisition, maintenance, operating and disposition cost, possible in-built loss prevention and a maximum of result achievement. The cost-benefit ratio is no longer satisfactorily estimated by comparing production costs versus selling price. The set of costs now comprises the design of a product or system, its manufacturing and distribution, its utilisation and elimination, including partial or total recycling. The benefits are instead measured by the performance during the period of utilisation.
It has to be understood that service functions have today absorbed the manufacturing process in a similar way as the industrialisation had started to absorb the agricultural production system 200 years ago. As a direct consequence we have to either adapt our current social and economic theories to the situation that is at our hands or set up a new general social and economic theory that helps us to better understand reality and provides us with the necessary tools to solve the new problems we are facing. Since the changes are so dramatic a mere expansion of current ideas recognized as the ‘prevailing opinion’ will not be sufficient. We need a new understanding of how our environment works to further the work in our field.

2 We propose to use the terminology as follows: ‘monetarised’ refers to systems where some form of exchange has taken place either for money (monetised) or not (non-monetised) but using implicitly a system of reference. ‘non-monetarised’ refers to systems where no exchange at all takes place: basically self-production systems. It is absolutely essential to make a difference therefore between non-monetised and non-monetarised systems.


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