Determinants of business and personal services: evidence from West-German regions

Abstract

In the Employment Guidelines for the year 2000, the European Commission stressed the need to develop a policy framework in order to fully exploit the employment potential of the service sector. This concern is especially related to Germany for its massive service gap compared to Anglo-Saxon (United States, United Kingdom) and Scandinavian countries (Denmark, Sweden) in general, and in personal and business services in particular. The focus of this study is to understand the theoretical basis of the dynamic of employment growth in services and to identify especially the determinants that foster the growth of business services and the creation of jobs in personal services in Germany. The paper starts therefore with an extensive literature review on service employment with a particular focus on business and personal services and on the German debate. For the empirical analysis, the study uses the variations in the structure and dynamics of employment in 11 agglomerated areas in West-Germany in the period of 1977 to 1998. As far as business services are concerned, the empirical analysis supports the concept of the interactive nature of knowledge intensive sector within business services and knowledge intensive manufacturing industries. A corollary feature is the strong correlation between the skill level of the regional labour force and regional employment growth, especially related to export-oriented services and business services. Knowledge intensive business services are still concentrated in the agglomerated areas. On the other hand, large-scale internal labour markets in manufacturing, located so far mostly in metropolitan areas, are transformed into network labour markets. In concordance with the location theory, we find a consistent pattern of relative employment losses in agglomerated areas due to a weakening of centripetal forces (linkages, thick markets, knowledge spillovers and other pure externalities) and a strengthening of centrifugal forces (increasing prices of immobile factors, land rent and commuting, congestion and other diseconomies). As far as personal services are concerned, the study confirms the argument that the service society provides a path for women into the system of gainful labour market work. This changes the form in which the female labour potential is organised but hardly the content. Thus, regions with high share of personal or social services have a higher female labour force participation and vice versa. Demand for personal services rises with qualification, especially with the skill level of women. Thus, we find higher service employment rates in regions with high skill levels, a pattern that correlates with agglomeration since the skill and income level in these regions is higher than in rural areas. The paper argues that one of the most important determinants of successful adjustment to 'globalisation' are information and communication networks. They are the crucial levers to enhance productivity in business services and knowledge intensive industries with likely spill-over to personal services. The reason is that information networks increase their efficiency with rising numbers of participants, probably exponentially. The existence and public support of such networks explains regional differences. Overall, the results justify the extension of the 'industrial-district' to the 'service-industrial-district' hypothesis. (author's abstract)

"In den beschäftigungspolitischen Leitlinien der EU-Kommission für das Jahr 2000 wird die Notwendigkeit hervorgehoben, politische Rahmenbedingungen für die volle Ausschöpfung des Beschäftigungspotentials des Dienstleistungssektors zu schaffen. Gerade für Deutschland, wo im Vergleich zu den Vereinigten Staaten, Großbritannien, Dänemark und Schweden eine erhebliche Dienstleistungslücke herrscht, ist diese Einschätzung der EU-Kommission von großer Relevanz. Im Zentrum der Studie stehen die theoretischen Grundlagen der Beschäftigungsdynamik im Dienstleistungssektor und die Identifizierung jener Faktoren, die das Wachstum unternehmensnaher Dienstleistungen und die Arbeitsplatzschaffung im Bereich personennaher Dienstleistungen fördern. Die empirische Analyse basiert auf dem Vergleich der Beschäftigungsstruktur und -dynamik in elf westdeutschen Ballungsregionen im Zeitraum von 1977 bis 1998. Bezogen auf unternehmensnahe Dienstleistungen wird die These einer Interaktion zwischen wissensintensiven unternehmensnahen Dienstleistungen und wissensintensiven Industriezweigen gestützt. Bezogen auf personennahe Dienstleistungen stützen die Ergebnisse der Studie die These, daß 'Dienstleistungsgesellschaften' Frauen den Weg in das Erwerbssystem öffnen. Die Studie kommt zu dem Schluß, daß Informations- und Kommunikationsnetzwerke die wichtigsten Faktoren für eine erfolgreiche Anpassung an Globalisierungsprozesse darstellen. Insgesamt betrachtet rechtfertigen die Resultate eine Erweiterung der 'industrial-district'- zur 'service-industrial-district'-Hypothese." (Autorenreferat)