Coming Up With Business Ideas
Future Prospects for Service Industry
Written by Samuel Muriithi for Gaebler Ventures
The service industry scene has witnessed growth progressively thanks to the stimulation effect brought about by several factors. Some of these include decreased government interference, the introduction of new technologies, an increased supply of service providers and the subsequent competition that this has brought. What does the future hold for the service industry?
The said growth of the service industry has been accompanied by a dip in the quality of services offered by many providers.
The service industry is generally plagued by three main hiccups i.e. poor management, low productivity and overall inefficiency. Trying to increase productivity in the face of inefficiency is particularly challenging.
For an entrepreneur who is keen to start a service industry business, one of the greatest challenges that he/she will face is trying to increase efficiency. The provision of services has traditionally been done person to person but the frailty of the person always catches up despite the initial enthusiasm. It is quite the opposite state of affairs when we consider the manufacturing industry. The adoption of machines and new technology means that efficiency has been greatly improved. The said service industry entrepreneur may take the cue and adopt new technologies to offer a service more efficiently. All of us have certainly enjoyed the convenience of using an ATM as opposed to standing in queue in a banking hall.
The service industry has been greatly augmented with the incorporation of strategies from the manufacturing industry including mechanization, specialization, assembly-line specialization and organizational consolidation. Mechanization benefits can be seen e.g. through the use of commercial laundry machines to hasten output. Assembly-line specialization has revolutionized service provision in fast-food retailing. There is lots of specialization in healthcare provision and consolidation is evident when a hotel adds a gym for the sake of its guests.
An overall assessment of the service industry's future creates a picture of continued growth into the future. As businesses become more complex by the day, the need for relevant specialists continues to increase. These growth assessments for the service industry are however subject to various factors, both internal and external, that may limit the same.
The external factors are quite telling in the modern day. The use of the internet has rendered many service businesses redundant e.g. the need for realtors is rapidly diminishing as homeowners are now capable of selling off their houses without these agents. New technologies like the production of home theaters has meant that movie theaters are losing out as people prefer in-home entertainment. Internal factors that will curtail future growth include the limited sizes of individual firms, lack of enough manpower with specialized skills e.g. in healthcare, and limited competition in many service industries. Two other factors that will contribute to a contained growth rate in the service industry are the failure to adopt research and development extensively and failing to make optimal use of marketing.
Samuel Muriithi is a business owner in Nairobi, Kenya. He has extensive international business experience in the United States and India.
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