Business services are the specialized offerings and support functions that enable companies to run smoothly and thrive. From managing finances and navigating legal intricacies to harnessing technology and taking care of people, business services are the unsung champions that help companies stay competitive.
In the context of globalization, the growth of business services has accelerated as companies continue to outsource non-core activities, particularly in emerging markets. This has resulted in the development of a large and diverse business service industry. Increasingly, business services are delivered across national borders and involve complex inter-company contracts. This has led to the emergence of a new type of company known as a global business services provider (GBSP).
A GBSP offers an integrated suite of business process outsourcing services, typically leveraging shared infrastructure and standardized processes to deliver greater efficiency and scale. The resulting business services models are characterized by reduced operating expenses, increased flexibility and improved productivity.
As the name suggests, business services are intangible goods that are a vital part of a functioning business. They include everything from IT support to marketing to consulting and more. These services allow businesses to delegate their non-core operations to external providers, which in turn can offer better quality and a wide range of capabilities that can be customized to the specific needs of a particular business.
One of the key differentiators between goods and services is that a service cannot be stored for future use, while a good can. This difference can be very important for a company that depends on the provision of a service to customers, such as a TV repairperson or a painter. It is possible, however, for a company to offer alternatives to its customers in order to retain or gain market share.
Establishments primarily engaged in furnishing business services not elsewhere classified, such as bondspersons, drafting services, notaries public, lecturers and speakers’ bureaus, sign painting, water softening services, and employment services for the disabled, on a commission or fee basis are classified in this category. These services are a necessary component of many manufacturing and transportation industries.
The wide variety of business services available enables companies to tap into expert expertise, streamline operations and navigate complex regulatory landscapes. The increasing availability of business services worldwide also opens up significant opportunities for international expansion. The European Union has taken steps to reduce barriers and facilitate the cross-border provision of business services by implementing EU Internal Market legislation and policies. As a result, it is now easier for business services providers to provide their services across EU borders and to compete with each other. The European Union’s Single Market has become a hub for business services activity, which is expected to grow further in the years ahead. As a result, there is a strong demand for skilled workers in the sector. The industry is expected to grow globally over the next few years due to a growing need for these specialized offerings.