"Beyond the Balance Sheet" and the Global Economic Sectors

In a series of articles entitled "Beyond the Balance Sheet", FORBES has examined certain corporate characteristics that are not always quantified on the balance sheet, but, nevertheless, contribute to shareholder value. Using a technique called "data surface mining" (DSM), the previously published data were further analyzed to characterize the similarities and differences between the goods and service sectors; the results of these analyses are presented herein. In addition, the issues of technology management especially relevant to the service sector are presented. These issues are of critical importance in light of the fact that the service sector represents 80% (GDP and/or employment) of the United States economy and is of increasing importance in the global economy. Furthermore, technology management in the service sector has not has not been given great attention in the academic literatur

Innovation and the economic sectors

An analysis of the contribution of research and development and concomitant innovation to corporate market valuation was reported by Fluke and Kump. The data were further analyzed to ascertain the relative R&D investment in the service sector and the goods sector in a population of 30 companies most affected by accounting treatment of R&D expenditures; it was found that 97% of these companies are in the goods sector. All ten of the companies that have generated the most U.S. patents in the last five years are in the goods sector. Of the ten companies that made the largest investment in R&D, 90% are in the goods sector. Inferences related to the nature of the service sector are discussed

Electronic identification, personal privacy and security in the services sector

The continued proliferation of services in the economy depends on being able to make co-production secure in the matter of protecting the privacy and security of customer data/information. The increasing prevalence of electronic means of identification, from magnetic stripe cards through touch cards, GSM SIM cards, passive and active radio frequency identification (RFID) tags, to contact and contactless smart cards, has created a great increase in the efficiency of some security and consumer commercial operations, and an at least equal increase in convenience for both the public and administrators of these systems. However, these technologies are being used in ever more sensitive applications, and give rise to serious concerns over personal safety and privacy, identity theft, commercial security, and even to some extent national security

Recent productivity trends

Recently published Total Factor Productivity trend data are analyzed to ascertain whether there is a difference in trend between the Services Sector and the Goods Sector. These data represent performance of the 100 largest U.S. companies for the year ending October 31, 2002. It is noted that the growth rate for the Goods Sector exceeds the rate for the Service Sector by approximately one percentage point. Since the Services Sector represents approximately eighty percent of the economy, there is significant opportunity for a major impact on the economy if parity between the two sectors were achieved through the improvement of a single percentage point in the Services Sector