(Fourastié 1949; Touraine 1969; Bell 1973). The research studies of Engel and Baumol provide the main foundations of this thesis. Engel’s law postulates that the increase in purchasing power leads to a shift in household demand from basic necessities (especially food) to mainly industrial goods and then to “higher” goods (health, education, leisure), which are essentially services. Baumol’s work has established that productivity growth is on average faster in the industrial sector than in the service sector, justifying the irreversible decline in industrial jobs4. Today, major market trends, such as the aging of the population and the preference of younger generations for use rather than possession, only amplify household demand for services. The behavior of companies, by outsourcing a growing number of activities, from the simplest (maintenance of green spaces) to the most complex (human resources management), also contributes to the dynamism of the services market.
In a complementary way, the industrial company feeds into this reality by backing an ever greater share of its added value with service activities. The “servuction” or tertiarization of industry are the terms commonly used today to indicate the potential of services to enhance and differentiate the industrial company’s offer. The growing technical complexity of products naturally leads to the launch of specific services to support their marketing, distribution, consumption and recycling. This is one of the challenges of Industry 4.0, which relies on the Internet of Things and data to offer innovative services that generate new sources of profit.
Finally, at the very heart of development economics thinking, while industry has long been considered indispensable for growth, the idea is now also defended that a country can develop from its service activities without necessarily relying on a solid industrial sector. India illustrates this new path of economic development, with growth based in particular on the export of advanced services, rooted in new technologies (Kucera and Roncolato 2016).
2.1.2.2. Neo-industrial thesis
However, in the 1970s, and more recently during the 2008 crisis, given the slowdown in growth, an opposing trend emerged that attempted to re-evaluate the importance of industry. The “neo-industrial” thesis attributes a driving role in the economy to the industrial sector. According to this thesis, the tertiary sector cannot develop without maintaining a dynamic in the industrial sector. In the face of deindustrialization, the neo-industrial thesis displays the will – some would say the utopia – of reindustrialization. Reindustrialization seems to be a powerful political argument, since it is regularly used by actors from all sides of the political spectrum, up to and including Bruno Le Maire’s recent statement that “France has not chosen to be a service economy”5.
The neo-industrial thesis probably contributes to a certain distrust of service. In a 2013 book, Augustin Landier and David Thesmar denounced three preconceived notions that they believe are sinking France, to use the title of their book (Landier and Thesmar 2013):
– misconception number 1: a France without industry would be Disneyland;
– misconception number 2: to save jobs, one has to save the industry;
– misconception number 3: a real engineer works in a factory.
The economic and health crisis at COVID indirectly revives this debate on reindustrialization and gives new weight to the neo-industrial thesis.
2.1.2.3. Towards complementarity between industry and service
While the extreme positions around which the “post-industrial” and “neo-industrial” theses are developing are attractive, the fact remains that they leave a damaging void, that of the complementarity between service and industry6. Indeed, we are forced to admit that as industrial companies develop and become more complex, they not only outsource more and more of their activities (security, catering, etc.) but also call on increasingly sophisticated services (engineering, consulting, waste treatment, etc.). In this sense, industry is fueling the demand for services. But can we also reject the hypothesis that the dynamism, innovation, growth and sophistication of service activities support and assist industrial development? In particular, industrial companies cannot meet the digital challenge without the support of digital service companies to rethink their strategy, processes and offerings. Industry 4.0 will undoubtedly be both industrial, to meet the technological and environmental challenges of society, and “service-oriented”, to deliver the value expected by the market.
The time is no longer to question the supremacy of service in our economies but to create synergies, complementarities and even mergers between the two.
2.2. Defining the service
Services have historically been defined by default as activities that cannot be classified in industry or agriculture according to the usual INSEE nomenclature. Economic science has been particularly concerned with approaching a definition of service, with the desire to move beyond the debate between material and immaterial and productive and unproductive, and by focusing more on the conditions and characteristics of service production7. While it remains ambitious to try to define service, it is still necessary to understand it. Two complementary angles, the organizational angle and the market angle, can contribute to understanding it.
2.2.1. The organizational angle: the concept of servuction
Servuction8 is one of the founding models in service management and remains an essential reference for understanding the reality and challenges of service at both a marketing and managerial level. This neologism, formed from the terms service and production, indicates the production system of a service. The model identifies the key elements necessary to produce a service and highlights the major role of the customer and the resulting managerial implications. The servuction model is shown in Figure 2.1.
2.2.1.1. Elements necessary for the production of the service
Five main elements make up the servuction model:
– the front-line employees in contact with the customer; these employees may disappear in automated or digitalized services; however, they remain essential in most service situations, if only to relay a failure of the technical system;
– the physical evidence is made up of all the material elements necessary for the production of the service and which can be used by the customer, by the front-line employees or by both at the same time;
– the internal organization system is the part that is not visible to the customer; often called the back office; it supports the front office, which is the part visible to the customer;
– the customer who, unlike the production model, is present in the service production model, participates in the production of the service;
– the service is the goal of the system, the result of the interaction between all the elements.
Figure 2.1. Servuction (Eiglier 2004, p. 15). For a color version of this figure, see www.iste.co.uk/mathieu/services.zip
2.2.1.2. Co-production of the service
The notion of co-production is an essential specificity of service management. It indicates that the service cannot be produced by the service provider alone but that it is co-produced with the client. Co-production not only signals the clients’ participation in the production of the service but also seals the necessity of their presence in the production of the service. The notion of co-production