Boosting Productivity in Services through Digitalisation

The private service sector is a critical driver of the Finnish economy, contributing significantly to economic growth and employment. Currently, the sector is undergoing a substantial transformation due to a range of factors, including rapid digitalisation and other changes in the business environment. These changes are reshaping the sector and presenting new opportunities for growth and innovation.

This research project offers insights into the continuing transformation of the private service sector and its implications for productivity and other economic outcomes, while also providing research-based recommendations for policy and interventions aimed at boosting productivity in knowledge-intensive services. These findings will be instrumental in guiding informed decision-making for both policymakers and business leaders, driving growth and competitiveness in the Finnish economy, and providing data to support the scaling up of service firms in the country.

To address these issues, this project has three primary research goals:

1. To examine how digital transformation relates to productivity in the private service sector in Finland, including an analysis of the latest trends and underlying factors that drive digitalisation at the company level.
2. To analyse the allocation of labour and capital within the service sector in response to digitalisation and changing market conditions, and how companies are adapting their business models.
3. To investigate the role of outsourcing in the service sector and its impact on productivity, and to understand the transformation of the sector through a modelling framework that considers various drivers, policies, markets, and competition.

The project is conducted in cooperation with Jönköping International Business School (Sweden) and University of Oxford (UK).