Technology, Organisation and Productivity Performance in Services: Lessons from Britain and the United States,

This paper first documents the comparative productivity performance of the United States and Britain since 1870, focusing on the transition in market services from customised, low-volume, high-margin business organised on a network basis to standardised, high-volume, low-margin business with hierarchical management. A model of the interaction between technology, organisation and economic performance is then provided, focusing on the difficulties of transition from networks to hierarchies. Two general lessons are drawn: (1) developments in services must be analysed if the major changes in comparative productivity performance among nations are to be understood fully (2) technological change can cause difficulties of adjustment in technology-using sectors if it is not suited to the social capabilities of the society.