Technology, Organization and Productivity in Services: Lessons from Britain and the United States Since 1870
University of Warwick - Department of History
University of Warwick - Department of Economics; University of London, Queen Mary - Department of Economics
CEPR Discussion Paper No. 4428
This Paper first documents the comparative productivity performance of the United States and Britain since 1870, showing the importance of developments in services. We identify the transition in market services from customized, low-volume, high margin business organized on a network basis to standardized, high-volume, low margin business with hierarchical management, as a key factor. A model of the interaction between technology, organization and economic performance is then provided, focusing on the transition from networks to hierarchies. Four general lessons are drawn: (1) developments in services must be analyzed if the major changes in comparative productivity performance among nations are to be understood fully; (2) different technologies and organizational forms can co-exist efficiently; (3) technological change can cause difficulties of adjustment in technology - using sectors if it is not suited to the social capabilities of the society; (4) reversal of technological trends can lead to reversal of comparative productivity performance.
Number of Pages in PDF File: 55
Keywords: Productivity, services, technology, organization, hierarchies, networks
JEL Classification: N10, O40working papers series
Date posted: July 9, 2004
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