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International Business Management and Entrepreneurship Lecture Notes [2]

International Business Management and Entrepreneurship Lecture Notes [2]

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Published by Arun Kumar

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Published by: Arun Kumar on May 13, 2011
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Historically, in the U.S., productivity in the service sector has not increased as rapidly
as with the production of goods. Difficulties arise because service-sector work is



1. Typically labor-intensive (e.g., teaching),

2. Frequently individually processed (e.g., investment advice),

3. Often an intellectual task performed by professionals (e.g., medical diagnosis),

4. Often difficult to automate (e.g., a haircut), and

5. Difficult to evaluate for quality (e.g., the performance of a law firm).

Low-productivity activities, such as cleaning, food preparation, laundry service, and
child care, have also been growing in the service sector as more families are composed
of two working parents and may bias productivity measures downward.

Side Note 2.5.5 (Service Productivity in the U.S.) Productivity is highest in
the U.S. in both overall
and service productivity. Heizer notes [1, p. 18]

Retailing in the U.S. is twice as productive as in Japan,5
The U.S. telephone industry is twice as productive as Germany’s, and
The U.S. banking system is about 33% more productive than Germany’s.

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