Service measurement and definition: challenges and limitations

In recent years, there has been significant growth in the contribution of services to the economy of developed nations. However, despite the importance of the service economy, there has been a delay in the collection of data. The challenges relating to the definition and classification of services, alongside the measurement of their performance and innovative effort raise a number of important issues yet to be addressed adequately. This has partly contributed to the delay in the development of public policies aimed at sustaining the growth of services. This chapter aims to shed some light on the conceptualization of services and service performance measurement. The aim is to present some stylized facts and to highlight limitations and advancements in an understanding of the nature of services, the associated statistics and performance measures. In conclusion, ways in which policymakers, academics, and businesses may revisit the basics and rethink policies and strategies are suggested to ensure that the contribution of services to economic competitiveness and more in general to the UK economy are maximized.