In my keynote speeches I often ask the audience what proportion of the US economy is services. The majority of people guess far below the correct figure, which is 82%. I often point to the following chart, which illustrates the opening words to my book Developing Knowledge-Based Client Relationships:
“In 1980 the US economy was worth $4.9 trillion, producing 1.3 billion tons of goods. Fast forward 20 years to 2000, and the US economy had almost doubled in size to $9.3 trillion, yet the weight of goods produced had only edged up by a few percent to 1.37 billion tons. The economic activity that accounted for this near-doubling in size of the economy was associated with almost nothing of substance, nothing that you could see. This massive growth in the economy was driven by information, ideas, services, and knowledge—things that weighed nothing.”
I’ve long held that the future of the economy is in professional services. Almost everything will be become commoditized in a global connected economy. But deep specialist knowledge applied effectively will have rapidly increasing value, so that over the next 18-25 years as the global economy doubles in size, professional services will account for the vast bulk of economic growth.
Despite the massive predominance of services in the economy, study and research of the services sector is massively under-represented. Only recently has activity picked up in the field. One significant initiative launched a few months ago is the Services Research & Innovation Initiative, established by IBM, Oracle, Technology Professional Services Assocation, and Service and Support Professionals Assocation, which intends to increase funding to study and enhance performance in the services sector.