The Progress Economy

DRAFT

Service (singular) is the application of capabilities for an actors benefit; distinguished from services (plural) the dual of goods.

The first thing to note is we use service in the singular. We do that as “a perspective on value creation rather than the product category of ‘services’ (plural)” (Edvardsson, Gustafsson and Roos. (2005) “Service portraits in service research: a critical review”).

What does this mean? Simply that we define service as Vargo & Lusch do:

service is the application of competence (skills and knowledge) for the benefit of another entity or the entity itself

Vargo & Lusch (2004), “Evolving to a new dominant logic for marketing”, Journal of Marketing, Vol. 68, pp. 1-17

That’s a contrast to our traditional approach where we talk of services (and goods), in the plural, as product categories. Where the services product category is defined in relation to the goods product category, usually as a poor relative.

Just like Vargo & Lusch in their “From Goods to Service(s): Divergences and Convergences of Logics” (Vargo & Lusch (2008)), we will draw a distinction between services (plural) and service (singular).

Instead of viewing services as a unit of output, we shift our focus to the process of service itself. Vargo & Lusch emphasise this distinction by using “service” in the singular, defining it as:

the application of competences (knowledge and skills) for the benefit of another party

Vargo & Lusch (2008) “From Goods to Service(s): Divergences and Convergences of Logics”

This reframing has three key implications, it:

• directs attention to understanding and developing competences rather than merely categorising outputs
• dissolves the traditional goods-versus-services debate by recognising that goods are simply a means of transporting service (knowledge and skills)
• opens the door to thinking in terms of effort expended in applying those competences (which is key to understanding price in the progress economy)

However, this definition requires some refinement to reflect the progress economy. Firstly, not all service benefits another party – self-service exists. Moreover, service is not limited to applying competences (knowledge and skills); other capabilities, such as physical attributes (eg strength), natural forces (eg movement from wind or waterflow), and abstract elements (eg time), can also be involved.

In The Progress Economy, we adopt a broader definition:

service (singular): the application of capabilities* to help oneself, or more often, another party to make progress

* knowledge and skills, as well as physical such as strength, natural such as movement of wind, or abstract such as timeBased on Vargo & Lush (2008) “From Goods to Service(s): Divergences and Convergences of Logics”

To complete the picture, capabilities are carried by resources; and progress is made through acts of resource integration (effectively applying capabilities).

TYPES OF SERVICE

There are various ways of categorising service.

One particularly useful way, in the progress economy, is to consider who applies capabilities (integrates resources). Sometimes the Seeker performs the work themselves, as a form of self-service. Sometimes the Helper takes on the effort entirely. Most often, it’s a blend of both.

It could be the “self”, as in a form of self service; or it could by completely the service provider; or a combination. This leads us to observe there is a continuum of progress propositions/service, ranging between enabling and relieving propositions. We call that the progress proposition continuum. A proposition’s position on that continuum is driven by who performs the majority of the progress-making activities. And sliding a proposition along it is a powerful lever for innovation.

Progress proposition continuum »

We can also categorise service by leveraging Lovelock & Wirtz’s four types of service processing (from ”ServicesMarketing”) to further understand service (and the types of functional progress Seekers are looking to make). They categorise service as:

• people processing – make progress on a human body (eg healthcare, hair cutting, fitness, nutrition)
• possessions processing – make progress with possessions (eg repair, storing, transporting)
• mental-stimulus processing – make progress with (eg education, gaming, entertainment)
• information processing – make progress that involves manipulating information/data (eg banking, IT services)

It’s a useful categorisation for when we want to hunt particular functional progress to address.