Is It Possible for an Economy to Be Based Entirely on Services?

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IE581-SERVICE SYSTEMS DESIGN

HOMEWORK 2

Answer a question: Is it possible for an economy to be based entirely on services?

ELABORATED BY:

        Lidia Reyes        1035455

        30 September 2015

Answer:

I think is possible because according with the explanation in the second class, I learned we could categorized a product (something tangible) as a service as well. Let me explained myself with the follow assumption:

If service = pay for performance (Spohrer & Maglio, 2008)

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Product= tangible                            people have to pay for something touchable    

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Service= intangible                       people have to pay for an experience                            

People receive thing or experience and no matter what people receive they pay for, for example, someone could ask himself: this product works how I expected? And if we talk about an experience, we could ask: this experience was how I expected? At the end the answer is YES or NOT, this is a common point I think between product/service, and people have to “pay for performance= Service. I think the most important difference between both concepts is how much a client participate into the “production” process whether or not something is tangible. When we talk about “experience” the client is more active during the “production” process. And when we talk about a tangible experience the client is not too active, just at the end when the client have to try it. So for me an economy could be based entirely on services by changing the concept about product. For example, I think Apple is doing something like this, because they take care a lot about the “experience” of their client related with their product, and that is why they are even more expensive, because if a company wants to ensure a better experience with the use of its products the production process to minimize failures, would be much more expensive, and this is something that happen into the service industry as well, but in a more delicate point considering the client is part of the “production” process of the experience, when companies are trying to guarantee a better experience, the service would be more expensive as well.

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