Business Services and the Coronavirus Pandemic
Business services are activities that support a company without creating or delivering a physical product. The activities are typically provided by one of a company’s internal departments, such as information technology, but may also be offered externally. Some common examples of business services include software development, consulting, telecommunications, and training. The coronavirus pandemic has accelerated this trend, with companies looking for ways to provide their services through new technologies and platforms.
The value of business services depends on how efficiently and effectively they are utilized. Companies that focus on the core competencies of their industry and outsource noncore functions can save money, improve productivity, and stay competitive. They can also benefit from the expertise and efficiencies of other organizations that have developed best practices in their field.
Many of the same tools and techniques that are used to develop business services can be applied to improve the efficiency of a company’s internal operations. For example, hiring a professional construction crew to build an office or warehouse can reduce the amount of time that a project takes and the cost of labor. Using IT systems to automate workflow processes can also save time and money.
While the economic potential of the business services sector is substantial, it suffers from low average productivity and persisting legal barriers. The European Union (EU) is taking steps to address these issues through new legislation and policy action. The Services Directive allows service providers to more easily establish themselves in another EU country, and the EU’s new External Market Strategy is aimed at stimulating competition by opening up markets to foreign suppliers.
There is a significant opportunity to increase the level of value-added services that are provided by business services firms, as well as to expand the scope and range of such services. This will require a significant investment in research and innovation, as well as changes to how business services are measured. The challenge for policymakers is to ensure that the proper balance is struck between growth, competitiveness, and regulation.
In the short term, the key challenge for businesses is to respond quickly to changes in demand for their services. A company that is slow to adapt its business models will risk losing out to more agile competitors. This requires a close focus on core competencies and effective use of new technologies, but it also requires leadership that is willing to make bold decisions when necessary. The right balance will allow a company to prosper in the current challenging environment. This will create jobs, and it will also enable consumers to enjoy greater choice and quality of services. This will lead to a more prosperous world for all. The author would like to thank the European Commission for its help in preparing this article. This work is based on contributions made by the following people and institutions: