Linkage Between Productivity and Innovation in Different Service Sectors
The importance of service sector has grown over time. In 2008, the share of the service sector in total value added was 70% in the EU-27. In Romania the share of service firms’ value added was the lowest (55%) and in Luxembourg the highest (85%). In Estonia service sector value added was 68%. The average share of service sector value added is higher in older member states. (Eurostat 2011) The service sector and its productivity need to be studied, because in Western Europe the level of productivity is lower compared to the productivity level of the United States. The key reason for differences in productivity levels is lower productivity growth in Western European service sector. (van Ark et al. 2008)
There is growing interest in analyzing the relationship between productivity and innovation (see, for example, Janz et al. 2004, Griffith et al. 2006, Masso and Vahter 2008, Mairesse and Robin 2009, Polder et al. 2010) Compared to the manufacturing sector, the service sector has been less analyzed, mainly because productivity measurement in the service sector is complicated and the service sector itself is very heterogeneous. The development of measuring productivity has been slower in the service sector (Adam et al. 1981; Mills et al. 1983) mainly because of the nature of services – their labour intensiveness, perishability, simultaneity, and intangibility (Drucker 1974). There are many factors that have an influence on service sector productivity. In ← 343 | 344 → this paper those factors have been narrowed...
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