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Shifts towards a Service Economy


Most of the worlds leading economies are  60-70% services based: Germany/US/Japan/UK/Russia an so on. This is a natural evolution as countries become more refined (1st World) and better connected globally.

As the Service Industries go up the Agriculture becomes much less. Also Manufacturing is less than half on Average. This also becomes key as a culture becomes more technologically advanced as many manufactured product become commoditised. Service management is a way to de-commoditise and differentiate these products from other brands.

In terms of percentage of labour force Japan has one of the biggest service industries in the world however they remain challenged on how to globalise these service sectors.

There are a few very innovative service based sectors from Japan but I wil list a few below:

ANA (ALL NIPPON AIRLINES) – Have introduced a new services replacing first class called First Square – facilities include a private suite with full flat bed, 23 inch Touchscreen and private coat closet. The service extends into the ANA lounge preflight giving customers their own private pod to work in before they jet off. And finally when you arrive back in Japan they offer customers a ‘Welcome Home’ package giving them a free helicopter ride or limousine ride into Tokyo. Even Economy class passengers benefit from 34” pitch seating USB and power ports and Sleep support and relax and refresh kits to get you on your way upon arrival.

ANA First Square

Komatsu Komtrax – Make very expensive mining and large track vehicles. Komtrax Tracking system tracks all of its products via GPS in real time including what they are doing and where the vehicle is at any one moment? This is all managed via a central management console at Komtrax. As a service this is in it’s infancy but as they have this technology in all of their vehicles they could easily start up a number of Service based functions on top of their actual products…

Komatsu Komtrax

• Remote anti-Theft – They can watch the equipment leave the site then even switch the       engine off.
• Broken down offsite assessment,
• Service channels
• Efficiency profiles to save money,
• Productivity of equipment i.e. possibly what money it earns, If its being used as it needs to be and also the time it is used.

The first area Anti-Theft is already in use and has resulted in insurance brokers now offering cost savings for owning Komatsu Komtrax products as they are more secure.

So why is it that Japan have all these great and innovative services but almost nothing apart from the products and services above in the Global Marketplace. I think a part of it is for the reasons already mentioned in my previous article*. Building on the cultural differences the Japanese service industry falls inline with Japan’s innovation profile and their reach for perfection on processes to the point that the disconnect seems to lie in commercially executable service propositions for a global market. The point being that the level of service is often in excess of what a normal global player requires and in turn this means that a financially unviable proposition. This is a big challenge for the Japanese culture as it in part is what makes Japanese innovations so great!

But again by more connected cooperative business ventures between foreign interests and Japanese service business’s a commercially executable proposition could be achieved.

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