Business Services in the EU
Business services are professional support activities, including technical, legal and employment services. They are one of the largest service sectors in Europe and contribute to 11% of EU GDP. The sector includes a wide range of activities, including technical, professional and trade-related services such as engineering, architecture, IT, facilities management, and legal services.
Service-providing industries are an important component of the European economy and play a central role in’servitisation’, enhancing the value of products through new combinations of goods and services and improving the competitiveness of firms and regions. They are a key driver of innovation and growth in the EU, with significant untapped potential that requires effective policy and regulatory action to unlock.
There are three main models for a business: selling physical goods, selling services and combining services and goods (see Figure 1). Businesses pursue the model that is most suitable for their skills, capital and resources.
Intangible Goods
There is an increasing trend to focus on intangible goods and not physical commodities, particularly for service-oriented businesses. This is driven by the need to increase efficiencies, improve customer satisfaction and reduce cost.
Software enhancement and upgrade is an example of this type of service, as it provides antivirus protection for a company or individual’s computer or phone and updates its applications. Another example is a company that provides medical advice and counseling, a service that is often a form of therapy.
Intangible Goods
When it comes to marketing, a salesperson will use different techniques when selling a product as opposed to a service. For instance, they might talk about the customer’s specific needs instead of talking about how they can help solve a problem.
They also might ask more questions to get the information they need before recommending something, rather than merely delivering a generic solution. They might ask about the client’s budget to determine whether it is a good fit for their business.
These salespeople will need to be able to communicate effectively with their customers and clearly define their needs. This is a skill that takes time to develop and is often learned through trial and error.
The ability to provide a high level of customer service is essential in the service business. This is because customers are a vital part of the operational process, influencing costs and quality in many ways.
Unlike products, services do not have inventory or are not stored for future use. In addition, they require active involvement of the customer until they are satisfied with the service.
They can be provided by employees, companies or even individual contractors. They are a major source of revenue for most businesses and provide opportunities to build a successful career.
The industry has a number of positive trends, with technology and digitalization driving increased demand for services. Additionally, demographic changes have resulted in increased leisure time and affluence. This has created a need for various services in areas such as child care, home care, drycleaning and lawn maintenance.