Technology, Organization and Productivity in Services: Lessons from Britain and the United States Since 1870

55 Pages Posted: 9 Jul 2004

See all articles by Stephen N. Broadberry

Stephen N. Broadberry

London School of Economics & Political Science (LSE)

Sayantan Ghosal

University of Warwick - Department of Economics; University of Glasgow - Adam Smith Business School

Date Written: June 2004

Abstract

This Paper first documents the comparative productivity performance of the United States and Britain since 1870, showing the importance of developments in services. We identify the transition in market services from customized, low-volume, high margin business organized on a network basis to standardized, high-volume, low margin business with hierarchical management, as a key factor. A model of the interaction between technology, organization and economic performance is then provided, focusing on the transition from networks to hierarchies. Four general lessons are drawn: (1) developments in services must be analyzed if the major changes in comparative productivity performance among nations are to be understood fully; (2) different technologies and organizational forms can co-exist efficiently; (3) technological change can cause difficulties of adjustment in technology - using sectors if it is not suited to the social capabilities of the society; (4) reversal of technological trends can lead to reversal of comparative productivity performance.

Keywords: Productivity, services, technology, organization, hierarchies, networks

JEL Classification: N10, O40

Suggested Citation

Broadberry, Stephen N. and Ghosal, Sayantan and Ghosal, Sayantan, Technology, Organization and Productivity in Services: Lessons from Britain and the United States Since 1870 (June 2004). Available at SSRN: https://ssrn.com/abstract=563281

Stephen N. Broadberry (Contact Author)

London School of Economics & Political Science (LSE) ( email )

+44 0 24 7652 3446 (Phone)
+44 0 24 7652 3032 (Fax)

Sayantan Ghosal

University of Glasgow - Adam Smith Business School ( email )

Glasgow, Scotland
United Kingdom

University of Warwick - Department of Economics ( email )

Adam Smith Business School
University of Glasgow
Glasgow, G128QQ
United Kingdom

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