Page 63 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes positive spillovers to other sectors and can give a cutting edge in these sectors while facing
international competition.
This combination along with retail trade can change the very face of the rural economy. The
tourism sector which is an industry in itself is another mine of opportunity for India. While
there has been a lot of hype about the potential of this sector, efforts are needed to make it a
reality. Shipping is another major service which can step up growth by tapping the opportunities
provided by India’s own merchandise trade. At present Indian ships cater to only 9 per cent of
India’s overseas trade which is abysmally low by any standards. Huge investment and
modernization are needed in this sector to capture at least a substantial portion of India’s
present, if not potential, trade. Port services where countries like Sri Lanka plan on the basis of
future cargo from other countries like India is another area needing urgent attention. A business
service which consists of many dynamic services is a sunrise sector. Financial services, health
care, and education are other niche areas with both external potential and internal opportunities
which can be tailor-made to serve the objective of more inclusive development.

The second challenge is to make some of the fair-weather services like business and financial
services more stable and less vulnerable to external shocks. While these sectors cannot be fully
insulated from external shocks in this highly globalised world, efforts are needed to make them
at least as stable as software and telecom services. This can be done by both piggybacking on the
progress of the software and telecom sectors and also making inroads in the domestic economy
where opportunities are aplenty. This brings us to the third challenge of domestic regulations in
most of these sectors. While in the WTO, India has been at the forefront of negotiations for
removal of such regulations in other countries, we also have to take a lead in making regulatory
improvements domestically as such regulations could come in the way of further growth of the
services sector. Addressing data problems in the services sector is another area where there is
need for early consolidation of isolated efforts. Addressing the challenges of the diverse sub-
sectors of the services sector by better and coordinated strategies can lead to exponential gains
for the economy.

Self Assessment

Multiple Choice Questions:
11. Which of the following is an example of a business to business (KIBS)?
(a) Internal IT help-desk services

(b) Web design and hosting
(c) Leisure services
(d) Hotels
12. According to Johnson & Clark (2005) Information and communication technologies (ICT)
have contributed to the development of new services by
(a) Decreasing unit costs and increasing volumes per unit
(b) Developing capabilities and developing commodity services

(c) Reducing complexity and thereby improving capability
(d) All of the above
13. Services have characteristics which distinguish them from physical products such as:
(a) Services are homogenous

(b) Services are co-produced by the consumer

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