1Center or American Progress | A Service Science Perspective on Higher Education
A Service Science Perspectiveon Higher Education
Linking Service Productivity Theory and HigherEducation Reform
Robert Lusch and Christopher Wu August 2012
Introduction
Policymakers are currently wrestling with undamental but complex questions about the uture o higher education, including how to hold colleges responsible or the billions o dollarsin ederal nancial aid money they receive and how to encourage lower tuition to increaseaordability or low- and middle-income amilies. Answering these questions requires a bet-ter understanding o how colleges operate and how we can measure their productivity andefciency. Marketing and education experts Robert Lusch and Christopher Wu explain howthinking about college education as a service can begin to answer some o these questions.
Le’s sar wih he basics and answer his quesion: Wha is a service and how impor-an is service in sociey?Sandard economic heory holds ha he economy is divided ino hree major indus-ry secors: exracive (primary); manuacuring (secondary); and services (eriary).Te exracive secor includes agriculure, mining, imber, and sheries—basically heexracion o naural resources. Te nex major indusry secor is manuacuring o boh durable and nondurable goods or eiher he indusrial, governmen, or consumermarke. Manuacuring is called a secondary secor because i relies upon he primary producion o he exracive secor or many o he raw maerial inpus.Te hird or eriary secor, services, alhough oen hough o as an inangible oupu, isessenially, or naional accouning purposes, viewed as a residual o he oher wo indusry secors—in essence, wha is no exracive or manuacuring is services. I includes many public (governmen employees) and privae organizaions across many indusries such asnance, insurance, ransporaion, wholesaling and reailing, healh care, enerainmen,proessional services such as legal and archiecure, and lierally hundreds o ohers.
2Center or American Progress | A Service Science Perspective on Higher Education
Employmen in advanced economies and hose wih high average household incomeusually have more han 65 percen o heir employmen and gross domesic produc,or GDP—he larges measure o growh in an economy—atribued o he eriary orservices secor, wih some economies being as high as 80 percen. And while he world’spoores counries coninue o rely heavily on employmen in exracive indusries, heservices secor is growing rapidly in developing naions as well.
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Because o he rise in ascendance o he services secor, here has been an increasedineres by indusry, governmen, and academia on undersanding he deerminanso produciviy in service indusries as well as service innovaion. During he agricul-ural and indusrial revoluions, economiss ocused a lo o heir research and innova-ion eors on hese secors and services were largely ignored. Tis began o change,however, around 15 o 25 years ago. Arizona Sae Universiy was a he oreron o his change wih he esablishmen in 1985 o an academic cener ocused on servicesresearch (co-auhor Rober Lusch was one o he cener’s ounding aculy members), which laer became known as he Arizona Sae Universiy W.P. Carey School o Business Cener or Services Leadership
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.Laer in 1998, Roland Rus, he disinguished Universiy Proessor David BruceSmih chair in markeing a he Universiy o Maryland, launched he
Journal o ServiceResearch,
which oday is undoubedly he leading scholarly journal in he world in ser- vice research. Shorly aer 2000, eors a IBM Corp. acceleraed around undersandingservices and Paul Maglio and Jim Spohrer a he IBM Almaden Research Cener
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led upan eor o advance he research and eaching o service, which was idenied as servicescience, managemen, and engineering, or SSME.Following IBM’s lead, in 2007 he Universiy o Caliornia, Berkeley, developed a ormalservice science, managemen, and engineering program around inormaion and servicedesign.
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In 2008 a special issue o he
IBM Systems Journal
was released wih 14 ariclesrom hough leaders across various disciplines ha inersec wih service science, manage-men, and engineering. In March 2009, 104 paricipans, represening 68 insiuions rom31 counries, gahered in Helsinki, Finland, or a program ocused on he developmen o SSME. Tis seminal even resuled in he publicaion o “Making Service Mainsream: A Whie Paper Based on he 2009 Service Science Summi.”
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oday universiies and counriesaround he world are acceleraing heir eors o undersand service and service sysems. An ineresing developmen arising ou o service science, managemen, and engineer-ing is a broadened and more sophisicaed view o service—one ha moves beyondmerely viewing services as a residual o he exracive and manuacuring indusries.More broadly and absracly, service is being viewed as he process o doing somehingor anoher person (or eniy) ha is benecial. Tink o i as he ac o helping anoher.Services (plural) oen reer o inangible unis o oupu ha a rm produces.
3Center or American Progress | A Service Science Perspective on Higher Education
For a universiy, or example, ha could be he number o credi hours o educaion pro-duced or number o degrees awarded. In wha has become known as service-dominanlogic,
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or S-D logic, service (singular) is he ocus. oo many universiies are overly ocused on producing credi hours or degrees ecienly (unis o oupu) raher hanoering and providing a se o services—insrucion, credenialing, career suppor,ood services—ha lead o hese oupus (credi hours and degrees) as an end resul. oexplain his beter, le us discuss he dieren ways a service can be provided. A service can be provided
directly
by doing somehing or he bene o anoher personas in he case o a nurse or physician reaing your illness or a resauran che preparing you a nuriious meal. Service, however, is also provided
indirectly
hrough a good. Tusa pharmaceuical drug provides healh recovery service, while a pre-packaged nuri-ious meal ha you can microwave provides nuriion service, and a exbook provides aknowledge-enhancing service.In brie, service-dominan logic views goods as appliances or hings you use o obain aservice. Tis may seem a bi exreme o he nonresearcher; however, in he global economy many manuacuring companies hink o heir oerings in his way. Te American mulina-ional conglomerae General Elecric Inc., or example, measures he oupu o is airplaneengine business in hours o hrus service or is airline indusry cusomers and no jus inerms o he number o urbines coming o he producion line. For GE his is a compei-ive necessiy as i allows or a ar beter undersanding o how is cusomers acually usehe manuacured good in he service delivery o heir own businesses. In ac GE now ocuses no on selling je engines bu on charging cusomers or hours o hrus service.Le’s examine how his all s in wih approaching educaion as a service.
Higher education seen through a service science lens
Tis expanded view o business oupu allows or a much more holisic view o how, when,and where educaion acually happens and how individual suden preerences and char-acerisics can drive he experience. No longer would we jus view he eacher as he eniy providing he service o educaion. Te classroom and all o is angible ariacs such asseaing, lighing, and whieboards are all par o he service provision. Tus he insrucionisel combined wih oher supporing services (or example, uoring, library assisance)consiue he
bundle o oerings that make up the service o education
. Tinking o educaionin hese erms, a chair ha is uncomorable or a sifing ho and unvenilaed classroomcan all become barriers o receiving he bene o educaion. A chair can be viewed as aplace o si bu i can also be viewed as a learning enhancemen service.For his reason, in service-dominan logic, all individuals and eniies are viewed asresource inegraors or service bundlers. Te suden in he classroom lisening o a lecureis bundling many resources such as oher sudens in he classroom, heir noepad (elec-
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A Service Science Perspective on Higher Education
Robert Lusch and Christopher Wu explain how we can achieve higher education reform through the use of service-dominant logic.
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