Service sector productivity in the European Union member states

Abstract

PURPOSE: The aim of this study was to identify the level of EU service sector productivity.

DESIGN/METHODOLOGY/APPROACH: Three research methods were used: overview and critique of literature in the field of described subject, monographic method (using an analysis of secondary data) and statistical method using descriptive statistics (arithmetic average, standard deviation). Productivity research concerned sectors of EU countries during 2008- 2016 in terms of indicators. Countries were classified using factors such as scale of production, labour productivity and fixed asset productivity. In the mentioned period the dynamic and the level of these factors were determined.

FINDINGS: The results allowed the positive verification of the proposed research hypothesis. Service sectors of countries with lower economic and social growth (production potential) were characterized by a higher level of productivity of fixed assets. Such countries included: Cyprus, Denmark, Greece, Bulgaria. At the same time, it was noted that the highest indicators of productivity were present in: Luxembourg, Denmark, Ireland and, for labour productivity, also Bulgaria, Greece, Cyprus.

PRACTICAL IMPLICATIONS: Practical recommendations is important especially in countries with indices at a low level. They are particularly at risk of relatively low competitiveness compared to other EU countries. Good practices aimed at preventing this could include stimulating innovation in service enterprises, e.g. regarding the implementation of innovative solutions.

ORIGINALITY/VALUE: Productivity is regarded as one of the features that impact competitiveness, which has the important role in the blobalised world economy. Moreover, the issue of productivity in the service sector is a less popular topic than the same issue concerning the industrial sector. Lastly, findings and conclusions from this paper, may inspire researchers to conduct in-depth research of the productivity issues, for example: a combination of a study of the service sector productivity with the innovation potential as well as its innovativeness and quality.