The Paradox of a Service-Oriented Economy for Sustainability: Co-Evolution between Innovation and Resources Effectuation by a Global Complement

By Horio, Hiroyasu; Watanabe, Chihiro | Journal of Services Research, April 1, 2008 | Go to article overview

The Paradox of a Service-Oriented Economy for Sustainability: Co-Evolution between Innovation and Resources Effectuation by a Global Complement


Horio, Hiroyasu, Watanabe, Chihiro, Journal of Services Research


INTRODUCTION

In line with the increasing constraints in the resources and environmental capacity together with the increasing preference in shifting from materials to services, the share of service industry has been increasing substantially in industrialized countries corresponding to their industrial development. A shift to a matured economy in these countries has accelerated such a trend leading to a service-oriented economy. Figure 1 illustrates the share of the output in Japan's industry over the period of 1955-2005 together with the trend in the international oil prices in the same period.

Looking at the figure abovewe note that the share of the service industry has shown significant increase particularly after the first energy crisis in 1973 in Japan in which securing the energy resources was the Achilles' heel in its sustainable growth. A service -oriented economy is really expected to play a significant role in relieving such constraints on an economy by means of technology/information substitution for constrained production factors such as energy (Chen, 1994, Watanabe et al., 2004).

However, contrary to such an expectation, the dramatic increase in crude oil prices that emerged in the beginning of the 2000s has revealed the paradox of a service-oriented economy. Japan has been recognized for its notable energy efficiency improvement by means of technology substitution for energy that induced vigorous industry R&D leading to a high-technology miracle in an industrial society (Watanabe, 1992; 1999). However, its efforts to shift to a service-oriented economy corresponding to a paradigm shift to an information society have produced opposite results by increasing industry's unit energy consumption and decreasing price elasticity to energy consumption.

Figure 2 illustrates the trend in the unit energy consumption in Japan's manufacturing industry over the period of 1965-2005. Figure 2 demonstrates a conspicuous energy efficiency improvement in Japan's manufacturing industry based on its technology substitution for energy driven by the energy crises in the 1970s (Watanabe, 1999). However, such a conspicuous accomplishment has terminated in the beginning of the 1990s and changed to an increasing trend. While this timing corresponds to the timing of the oil glut circumstances demonstrated in Figure 1, it also corresponds to the emergence of an information society and subsequent advancement of a service-oriented economy. The multiplier effects of such circumstances led us to overdependency on information technology (IT) equipments which have become energy dependent as the service industry has been seeking to improve their facilities by providing information networks, flexible logistics networks, 24-hour air conditioning, highly equipped design studios, and worldwide conference systems. Also it is notable that the energy consumption has started rising corresponding to the production and the use of the information equipments such as large screens, high performance LSI, full automation system, prompt start-up equipment.

The above phenomena reveal a paradox with respect to a serviceoriented economy for sustainability. Furthermore, while the advancement of IT is expected to lead to a globalized economy, it also shows the result of increasing constraints by means of less effectuation of energy use. Supported by the advancement of IT, industrialized countries are now beginning to outsource their manufacturing production processes including assembly and fabrication processes to industrializing countries because of lower labour costs. Taking an example from the computer industry, sales and after-sales service sectors are providing greater profitability than assembly and fabrication. Companies in industrialized countries are therefore transferring their low-profit assembly and fabrication sectors abroad or outsourcing them, focusing their resources instead on development. The White Paper on Energy published by Japan's METI1 (2005) revealed that given such outsourcing proceeds from Japan to neighboring countries, energy consumption will increase to more than 6 times higher than the state when the production was conducted in Japan. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Paradox of a Service-Oriented Economy for Sustainability: Co-Evolution between Innovation and Resources Effectuation by a Global Complement
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.