Jaké reformy a proč (201) Wawrosz: Prod. Services

25. srpen 2014 | 08.00 |

Následující příspěvk byl připraven na mezinárodní konferenci v Turíně a byl zde též přednesen. Obsahuje několik nových prvků oproti materiálům, které byly doposud v rámci diskuse zaměřené na přípravu pracovní části 17. ročníku konference Lidský capital a investice do vzdělání předneseny. Uveřejňuji jej na několik pokračování. Toto je druhý z nich:

Transferred price and the sector of productive services as the key preconditions to smart, sustainable, and inclusive growth II.

Petr Wawrosz, Radim Valenčík

3. Characteristics of the sector of productive services

It is clear from the above mentioned that all three terms (sustainable growth, inclusive growth, and smart growth) are associated with investments in human and social capital. The definition of the term smart growth explicitly mentions investments in education, research and innovation. Sustainable growth may only exist if we can find such ways that would make it possible to meet our needs without limiting the needs of the future generations. We can agree with the opinion of Kim and Lee (1999) that such fulfillment of our needs is only possible as a result of advanced technology, which is only possible thanks to investments in human and social capital, with people gaining knowledge, skills, and capabilities in respect of such technology and its application in the society. The concept of inclusive growth, when the members of disadvantageous groups are included among people, whose activities contribute to economic growth, can only be implemented if the members of disadvantageous groups develop their skills and abilities, but first they have to receive knowledge on how to develop them. In this paper, we rely on the conviction that a lot of knowledge, skills, and capabilities cannot be obtained and/or developed by people on their own. In such case, some people must exist that would assist with the obtaining and development thereof. These people may be parents and other relatives, neighbors, friends, as well as people working in specialized organizations that provide knowledge to their clients and develop their skills and capabilities. Schools, educational agencies, etc. are the typical example of such institutions. If we somewhat expand our view, such organizations may also comprise entities, the objective of which is to ensure that people maintain and are able to use their knowledge and skills, or to ensure that they are able to obtain and develop them for as long as possible throughout their life, as appropriate. This concerns, for example, medical facilities, spas, entities providing sport-related services, etc.

In general, entities that offer the acquisition, development, and preservation of knowledge, skills, and capabilities to their customers may be referred to as entities operating within the sector of productive services. Why did we choose this name? We believe there are the following reasons for this:

1. The production of this sector may lead to sharp and long-term increase in the productivity of labor employed within industry and personal services associated with industry. In other words, this sector offers services that make it possible to increase the productivity of human activity.

2. The production of this sector may lead to sharp and long-term increase in the productivity of all resources originating from land as the factor of production as well as resources in the form of capital goods in the area of industrial and agricultural production. Similarly as in the previous subsection, it holds true that the given sector offers services that make it possible to increase the productivity of human activity.

3. The sector may gradually employ the decisive quantity of labor or human capital, as appropriate.

4. The production of this sector may predominantly be applied within the sector itself. It also comprises the innovations' center of gravity.

5. The sector may significantly expand the range of people's needs. At the same time, this concerns needs that are more and more met by the production of the educational sector. The substance of such needs consists in the fact that the meeting thereof as well as the utility associated therewith, including the pleasure associated with such utility, immediately relates to the development and preservation of human capabilities. The given needs may then be referred to as the capability needs.

6. As a result of the above mentioned, this sector has a predominant share in the overall production and economic growth, the form of which is determined by the nature of its production (i.e. production, which is in the form of educational and other services aimed at the development and preservation of human capabilities).

In most subsections, we knowingly use the term "may” (e.g. "The production of this sector may lead to sharp and long-term increase in the productivity of labor employed within industry...”). The reason for doing this will be explained in Chapter 5. We believe the term sector of productive services is more precise than the normally used term knowledge society. The term sector of productive services is wider, encompassing not only the area of acquisition of knowledge, but also areas leading to their preservation (e.g. through medical and spa care, sports) and longest possible application (by extending the period, for which people can be economically active). At the same time, the term sector of productive services emphasizes that this sector offers production, which is aimed at increasing the productivity of other sectors. Since the production is most frequently in the form of services, the given word is emphasized. We should also note that the given characteristics of the sector of productive services are based on an analogical role, which was played by the industrial sector during the 18th and 19th centuries, i.e. the period of the Industrial Revolution[4]. The following also applied for the industrial sector:

-                     The production of the sector led to sharp and long-term increase in the productivity of labor for people employed in agriculture.

-                     The production of the sector led to sharp and long-term increase in the productivity of all resources originating from land as the factor of production.

-                     The sector gradually employed the decisive quantity of labor.

-                     Industrial production is predominantly applied within the industrial sector; the sector also concentrates innovations.

-                     The sector significantly expanded the range of people's needs, which are more and more met by the industrial production – i.e. through products and services produced by industry.

-                     As a result of all the aforementioned factors, the industrial sector has a predominant share in the overall production and economic growth, the form of which is determined by the nature of the industrial production.

Economic effects, which come into being within the sector of productive services, take the form of accelerated professional fulfillment, better professional performance, development of productive fulfillment capabilities, and longer zenith and horizon of productivity in terms of its clients. In plain terms, customers of the sector of productive services are able to carry out more activities as a result of the services provided by the sector, whereas the given capabilities are obtained faster, given activities are performed more efficiently, and customers are able to perform at least some of the activities for a longer period of their lives. The productive services refer to services that make it possible to acquire, develop, preserve, and apply human capital. It concerns services such as education and healthcare, as well as relaxation, recreational, pedagogical, and cultural and other services. All these services may be included in the area of social investments and social insurance. Social investment refers to the provision of services, through which people acquire and develop their human capital or which are used to preserve it, as appropriate. Social insurance refers to any and all activities that protect people from the risk of losing human capital.

4. Sector of productive services and smart, sustainable, and inclusive growth
How does the sector of productive services contribute to sustainable growth, inclusive growth, and smart growth? We will start with sustainable growth. The production offered by the sector represents substitutes of other goods and services. However, such other goods and services have more significant adverse impact on the environment – e.g. due to the fact that they utilize more natural resources or their effects impact the environment more. In case productive services play a major role within the economy, then the consumption will burden the environment less, consequently contributing to sustainability. Reduction of the environmental impact of people may be described as a first-degree effect of the sector of productive services. However, the importance of this sector lies within the second-degree effect. It is based on the fact that the development of people's capabilities (i.e. not only of individuals, but on a team basis as well, as part of the social division of labor, as appropriate) is also immediately associated with their ability to innovate. In case people acquire, develop, and preserve their knowledge, skills, and capabilities, they are able to innovate. Consequently, they contribute to economic growth. Moreover, the ability to innovate retroactively affects the development of other knowledge, skills, and capabilities. As a result of acquiring, developing, and preserving the given capabilities, people that had been previously excluded from the opportunity may participate in economic growth. Therefore, such growth may be referred to as inclusive growth. Due to its nature, it may also be referred to as smart growth.

The ability to innovate also relates to the sustainable aspect of the growth. As a result of innovations, we are able to reduce (even significantly or even radically in many cases) the quantity of natural resources per single unit of utility. In other words, the sector of productive services increases the level of productive human capabilities, which immediately determine how quickly and to what extent economic growth becomes independent on natural resources, i.e. to what extent the environmental burden and impairment are reduced. The resulting effect of reduced consumption of material or energy inputs per single unit of useful effect immediately depends on the technical and technological progress; such progress then depends on the level of productive human capabilities, whereas the level of productive human capabilities depends on the effectiveness of productive services that aim the acquisition, preservation, and application of human capabilities.

[4]For detailed characteristics of the Industrial Revolution, see e.g. Watt (2009).

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