Theoretical and Conceptual Foundations of Total Factor Productivity Measurement in Services: Looking Back and Ahead

  • Birgitte Andersen
  • Marva E. Corley
Part of the Technology, Globalization and Development Series book series (TGD)


For a few decades services productivity was widely discussed but little understood. This was mainly initiated by the productivity slowdown in the US from the 1970s to well into the 1990s. The essence of the debate was that the economy in general was experiencing a development and diffusion of a new technological revolution or techno-economic paradigm that was not being reflected in standard performance indicators, such as productivity. This was puzzling, particularly since the new key factor in creating and widening investment opportunities for productivity gains was information and communications technology (ICT) and microelectronics. At this time, ICT and microelectronics were (i) rapidly increasing supply and available in unlimited supply over longer periods, (ii) readily available in low and rapidly falling relative cost, and (iii) widely expanding their scope and pervasiveness in the sense that there was a clear potential for the use (or incorporation of) the new set of inputs throughout the economic system. Such factors had during previous technological revolutions in new key factors input for the economic system, spurred a jump in productivity levels and sometimes productivity growth rates. Previous technological revolutions include for example (i) the early mechanisation period (1770–1840) with mechanisation as key factor input, (ii) the steam power and railway period (1830–90) with steam-powered transport as key factor input, (iii) the electrical and heavy engineering period (1880–1940) with steel as key factor input, and the Fordist mass production period (1940–90) with oil as key factor input for wide applications (Freeman and Perez 1988).


Service Sector Total Factor Productivity Business Service Intellectual Capital Total Factor Productivity Growth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Birgitte Andersen and Marva E. Corley 2006

Authors and Affiliations

  • Birgitte Andersen
  • Marva E. Corley

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