This is the electronic version of the Autumn/Winter 1997 edition of ServiNews
What is needed is for service sector trade associations, policy-makers and national statistical agencies to determine precisely what statistics are required to measure activity and output in the services sector. Equally, there is a need to agree a time-frame in which new and improved service sector statistics can be developed and implemented.
From being considered as an agriculturally based rural society with an ageing population and very high levels of unemployment, the findings of the 1997 EU Labour Force Survey reveal a very different reality of the Ireland of 1997. Between 1990 and 1997 there has been a modest growth in population (+154,900 persons or +4.4 per cent). The 1997 Survey does, however, represent the highest level of population recorded as resident in the territory of the Republic of Ireland since 1881!
More significantly, the figures show a significant decline in Ireland’s dependency ratio - from 38.6 in 1990 to 34.5 in 1997 due to the decline in the numbers aged 0-14 years. At the same time, Ireland’s labour force has reached its highest ever level of 1,517,300, an increase of 207,700 (or +15.9 per cent) since 1990. This rapid increase in the labour force, at a time of rising levels of employment opportunities, has been reflected in a massive growth in private households - increased by 85,800, or by 12.3 per cent since 1990 - with consequent implications for land demands, the construction industry and rapidly rising house prices.
According to available statistics there has been a remarkable turnaround in Irish employment out-turns, especially in the 1990’s. Unlike many developed countries, Ireland has succeeded in increasing the number of jobs in industry, particularly through the vigorous promotion of Ireland as a location for foreign direct investment. However, the share of total employment in the industrial sector has fallen below the thirty per cent figure. Much of the recent growth of industrial jobs has been accounted for through the expansion of computer multinationals in Ireland.
The resurgence of the Irish economy is very strongly reflected in the
growth and expansion of the service sector, particularly service employment.
The service sector of the Irish economy now accounts for 61.1 per cent
of total employment in 1997 as compared with a mere 39.5 per cent in 1961
when the modernisation of Ireland can be said to have begun. At 61.1
per cent, the level of service employment in Ireland is rapidly approaching
the EU average of 64.5 per cent.
Service jobs in Ireland have grown by over 400,000 in the thirty-six
years 1961 to 1997. This growth figure alone is well above the 380,000
jobs in agriculture in 1961 when Ireland was deemed “an agricultural economy”.
The growth of over 400,000 jobs in services is somewhat greater than
Ireland’s total industrial employment in 1997 - 386,000! Since 1991,
service sector jobs have increased by 170,000 (or 26.2 per cent), whereas
jobs in the heavily supported industrial sector have grown by 68,000, a
most impressive achievement, but only 40.0 per cent of the number of jobs
created in services!
The 818,000 jobs in the Irish service sector represents over six times the total 1997 employment in Irish agriculture. It also represents over twice the total number of jobs in the Irish industrial sector - one of the most vigorous in Europe. But - a word of caution:
Part Time Jobs:
Some 169,000 persons (45,400 males and 124,500 females) had part-time jobs in the week before the 1997 survey, about 53% of whom worked in either Professional Services or Commerce, Insurance, Finance and Business Services. This is an increase of approximately 17,800 persons on the 1996 estimate. Of the increase of 214,700 persons at work between 1992 and 1997 (ILO classification), 65,500 is due to an increase in part-time work. Of this increase of 65,500 persons working part-time, 62,800 is accounted for by persons not under-employed, i.e. not seeking full-time work or additional part-time work. As in the case of most countries, it can be concluded that much of the growth in part-time working is a service sector phenomenon.
Taking a longer term perspective enables us to have a clearer view of fundamental trends. Over the twenty year period 1975-1995 the number of jobs in the European Union increased by 11.6 per cent or 15,421,000 to a total of 147,994,000. Over the same period, employment in the industrial sector declined 14.7 per cent or by a net total of 7,672,000 fewer industrial jobs. By 1995, industrial employment accounted for a total of 45,941,000 jobs, or 31.0 per cent of total employment.
Service employment has increased its share of an expanding EU jobs market
from just under 50.0 per cent in 1975 to 64.5 per cent in 1995. This
represents an actual growth of 29,965,000 additional service jobs over
the twenty year period, of which almost two-thirds were created during
the past decade and almost three million were created between 1992 and
1995. These figures show that by 1995 there were over twice as many
service jobs in the EU as there were jobs in industry. Between 1975
and 1995, the level of job creation in the service sector represented the
equivalent of two-thirds of all jobs in industry across the EU.
The labour supply, education and training implications of this growth
and restructuring continue to be profound in the extreme.
The 1997 EU Labour Force Survey provides a breakdown of the distribution of service jobs across eight regional areas. Of these eight, two regions - Dublin and Mid East - may be said to represent the entirety of the Dublin area and its extensive commuter belt. This shows that there is a very uneven spread of service jobs with a very high concentration in Dublin and the surrounding region.
More than three out of every four jobs in the Dublin region are in services and the Dublin region alone accounts for almost forty per cent of all service jobs in the country. Taken together, the Dublin and Mid-East regions (the functional Dublin region) account for 49.7 per cent of all services jobs in the country. In 1990, the share of total service employment in these two regions was 48.5 per cent - evidence of strong centralising forces at work in the 1990’s.
Across the country, those regions with the highest shares of services in their total employment are those with significant levels of urbanisation, notably Cork and the South West region. No region outside Dublin has a share of total employment in services which equates to the national average. The relatively underdeveloped, less urbanised Border and West regions both have the lowest shares of their employment in services - both below 50.0 per cent in 1997.
While the Dublin Region alone accounts for 29.3 per cent of national population and 31.4 per cent of total employment, this region contains over forty per cent of all jobs in Commerce, Insurance, Finance and Business Services (40.1%), Transport (45.8%), and Public Administration and Defence (42.2%).
Intellectual Property is becoming increasingly more important in Ireland with the rapid development of the music and entertainment business and, of course, computer software. The Irish Music Rights Organisation (IMRO) has become particularly active in recent years in the protection of music rights. Since its establishment as an independent organisation in 1995, it has turned its attention to the international market where Irish music has been particularly successful over a prolonged period of time.
On reviewing the provisions of the 1976 US Copyright Act, IMRO discovered that a number of exemptions to copyright control had been granted by the US Administration under that Act. IMRO is now in the process of challenging the validity of those provisions by virtue of the US’ international obligations under the GATT Agreement administered by the World Trade Organisation (WTO). Substantial sums are involved, both in terms of Ireland and the European Union, and the EU Commission appears optimistic about the possible outcome to this action.
Ireland is today the European software capital, the fifth largest producer of software in the world, and the second largest exporter of software, after the USA. Five of the world’s top ten independent software companies have major operations in Ireland. The indigenous software sector is also experiencing rapid growth. Between multinational and indigenous firms, employment currently stands at 15,000 and is expected to grow to 25,000 over the next three years, a level of demand which cannot be met from the third level education sector alone.
FÁS, (The Training and Employment Authority) is currently making
an important contribution to the stock of trained software personnel through
its various software development programmes which are run in a number of
locations around the country, e.g. Finglas and Loughlinstown in Dublin
as well as Cork and Waterford.
In 1996 over 300 people were trained on such courses. Also, towards
the end of 1996, FÁS, in association with Dublin City University,
began a new one year traineeship programme in Computing and Information
Technology. Key features of this initiative are:
Finally, FÁS has commissioned consultants to undertake a major study of the Software Sector. The study will map the future development of the sector over the short to medium term, and identify employment and training implications.
In recognition of the growing importance of the Services Sector, the Government decided to publish a Strategy to set out a clear and realistic framework for the development of this sector. This Strategy “A Government Strategy for Services - Employment Initiatives through the Millennium” was published in March 1997. The Strategy reviews the performance of the sector in recent years and presents a series of policy changes aimed at boosting the significant potential of the sector. In fact, more than 40 separate commitments for actions in favour of services are set out in the Strategy, with the aim of ensuring that services are positioned, with manufacturing, at the very core of Enterprise Strategy. The Strategy, thus, represents a change of policy orientation in favour of services so that their growth potential can be more fully exploited and their employment potential maximised.
The Strategy involves a targeted approach and adopts a three way classification for services that will be eligible to receive state supports. These are:
In recognition of the valuable contribution the private sector can make to the implementation process, it has been decided to involve the sector formally by way of a “Services Strategy Forum”. The objective of this Forum is to provide a mechanism to brief the private sector and the social partners on progress in implementing the Strategy and to gather their views and reaction on the progress being achieved. Thus, the Forum will provide a vehicle which will allow the private sector to influence how the Strategy is implemented. It is hoped that the inclusion of service sector practitioners in this process will result in the delivery of the Strategy in a manner which best meets the development needs of companies in the sector.
The “Strategy for Services Forum” will be held twice yearly in advance
of meetings of the Implementation Team in order that the views expressed
at the seminars can be taken into account in the formulation of the Progress
Reports required by the Strategy. The inaugural meeting of the Forum
took place on 30 October, 1997 and was attended by representative bodies
from the services sector, relevant state agencies and the Department of
Enterprise, Trade and Employment. Mr John Walsh of the Department
chairs the Forum.
The Service Industries Research Centre, Goodbody Economic Consultants and Tom Martin & Associates recently presented to the Electricity Supply Board (ESB) the results of a case study which they had carried out on the company's Career Change Service.
The Career Change Service (CCS) was established in 1996 to offer career planning support services to ESB employees leaving under the company's voluntary severance scheme. The range of services provided by the CCS including career advice, job search, training and financial advice, facilitated employees in finding alternative careers outside of the ESB or in setting up their own businesses.
The interviews with managers, trade union representatives and employees who had used the CCS indicated that it had brought significant benefits to the ESB and its employees. The case study indicated a number of options for extending the services of the Career Change Service to remaining employees.
The case study was carried out as part of an EU Leonardo da Vinci project, with Greek, Dutch and Portuguese partners, to develop new approaches to encouraging adaptability and mobility among employees.
Employment and Training are central to Temple Bar Properties (TBP) multi-stranded approach to the development of Dublin’s Cultural Quarter. TBP sponsors two FÁS Community Employment Schemes, Greening Temple Bar (an environmental project) and the Cultural CE Scheme which facilitates employment within the cultural organisations of the area. Both schemes have enjoyed high placement rates of individuals into full time employment, having completed their 52 week period on the schemes. The Community Employment record to date boasts over 75% securing full time employment within and outside the area. Constant communication and collaboration with the inner city local employment centres resulted in the TBP HQ designation as an employment Contact Centre for the Inner City.
In collaboration with the Dublin Inner City Partnership (DICP), Temple Bar Properties is piloting a local labour project (DICP initiative) on its development in the area west of Parliament street. The project aspires to secure 20% local labour from the adjacent inner city area.
Customised training initiatives run alongside all of TBP’s employment strategies. At present TBP is co-ordinating a customised Customer Service Training Programme for the cultural centres in the area. Inroads are now being made into training for retailers. In the interest of sustainability, TBP is committed to training as a central tool in the creation of employment in the cultural and other sectors.
SERVILAB, the Spanish Laboratory for the Applied Study of Service Activities,
is the outcome of a collaboration agreement between the University of Alcalá
de Henares and the Chamber of Commerce and Industry of Madrid. The
agreement was signed in Madrid in May 1996.
This initiative establishes the first Spanish centre of applied research
specializing in the services activities. With its headquarters in
the city of Alcalá de Henares, Madrid, SERVILAB will be directed
according to the objectives set by the two foundation institutions and
the advice of a Scientific Committee of Spanish specialists in different
services activities, as follows:
“SERVILAB proposes to contribute to research, information and knowledge
about the service industries. It aims to collaborate in the production
and diffusion of a culture of services in Madrid and in Spain, which permits
a better knowledge of the situation and possibilities arising from the
socio-economic world of services. The studies will serve as useful
instruments for decision making, both by politic authorities and enterprises
that use or produce services.”
The Director is Juan R. Cuadrado-Roura, Professor of Applied Economy
and the General Secretary Luis Rubalcaba-Bermejo, Associate Professor of
Applied Economy. The address is: Servilab, Plaza de la Victoria
1, 28802 Alcalá de Henares Madrid. Tel. (34-1) 889 57 03.
Fax. (34-1) 889 86 46. E-mail: servilab@lander.es
In an inaugural address entitled “Planning Education - Challenges and Opportunities”, Michael Bannon pointed to the need for new planning approaches in dealing with economies dominated by services and availing of modern technologies. There is a need to re-assess our thinking with regard to development standards, activity locations and the relationships between land uses. Above all, new technology will enable the development of new patterns of settlement and it will connect economic activities over much greater distances. While such opportunities augur well for urban peripheries and for smaller cities, they pose questions for the future of congested city centres. Copies of paper available on request from the Service Industries Research Centre