Measuring service sectors
Service sectors are believed to play a major role in the perceived productivity gap between Europe and the United States. Non-market services probably also contribute substantially, though hitherto their output has been poorly measured. Providing a measure was the EU-funded 'Indicators for evaluating international performance in service sectors' (INDICSER) project. The eight-member group aimed to devise the needed new indicators for growth in European service sectors. The investigation was structured into three main areas: measurement and conceptual issues, indicator development and research into performance. The project ran for three years to the end of 2012. In the first phase, conceptual groundwork identified problems in current practice and suggested alternatives. INDICSER documented labour force composition, and estimated investments in human and other capital. The study developed composite indicators about ICT use, plus new measures for labour market regulation. Europe's educational attainments were compared against Europe 2020 targets, and a separate study evaluated the research performance of EU universities. A second part of the research yielded numerous data series, available to the public via the project website. The data reflect many aspects of labour composition. The work led to sector-specific indicators, including a comprehensive database on performance aspects of EU financial services. Research using these data suggested larger increases in labour hoarding during the financial crisis compared to previous downturns. That led to lower productivity growth and lower wages, yet appeared not to have increased unemployment. The study identified potentially negative impacts of financial regulation on growth, given certain circumstances. However, the actual effects of financial regulation on investment depended on more complex factors. INDICISER studied and published on numerous economic issues. It highlighted areas where further work is necessary to ensure adequate performance measurement.The impact of the consortium's research was three-fold. It will enable academic and policy use of the database, yield insights into current information needs, and inform policy through its analytical results.
Keywords
Service sectors, productivity, labour force, information and communication technology
