ISS 2020 Vision Future of Service Management | Page 47

countries, but by middle and low income countries, whose middle classes will soon have the
disposable income to seek experiences and fulfil their immaterial needs as the middle classes
in high income countries have long done. While global population grows wealthier, it will
also grow older – requiring the expansion of services to elderly populations around the world.
Emerging regions will transition from a commodity or industrial economy to a service and
experience-based economy as GDP and citizen purchasing power both continue to rise. Near
2030, the aggregate purchasing power of the E7 economies (Brazil, China, India, Indonesia,
Mexico, Russia and Turkey) will overtake that of the G7 (United States, Canada, France,
Germany, Italy, Japan and the United Kingdom). The growing global middle class will more
than double by 2030, reaching 4.9 billion. 48 This represents opportunities for service providers
to further expand to new markets internationally, both in B2C and B2B (B2B2C) contexts.
Asia is projected to have the biggest growth (84%) in the global middle class, followed by
Middle East and Africa, with the North American middle class projected to decline by 5%
towards 2030. 48 According to interviewed subject-matter experts:
One of the main trends … when you look at the general business development is,
of course, internationalization and the increase in pace. Things get ubiquitous and
are available all over the world. As a Services Management discipline, we have to
take that into account and realize that people receive services not only in a local or
regional context, but also in an international context. Products and services should be
competitive not only in my city or in my country, but all over the world. 49
A growing global population with increased migration and mobility will create service
challenges around language and cultural alignment. These challenges create opportunities
to develop new culture-based service concepts and improve service outcomes through
cross-cultural learnings. The service providers who successfully develop solutions to these
challenges will have opportunities in urban centres and megacities around the world.
With increased globalization also comes new human resource (HR) challenges – a more
culturally-dense international workforce will require service providers to reconcile differences
within and across offices to achieve social symbiosis and operational efficiency.
Further challenges reside in effectively managing, engaging and motivating a multigenerational
workforce. More workers will also work past the age of 65 and this is something to be
considered in Service Management. Different generations bring different values and
expectations to the workplace and their consumption decisions. As a result, organizations
will be forced to find a way to create organizational co-existence and balance between the
needs of more diverse and individual-oriented workforces and the inherited industrial logic
that demands standardized solutions to reduce costs.
48 Kharas, H., The Emerging Middle Class In Developing Countries, OECD Development Centre, 2010.
49 Coenen, C., ISS 2020 Vision: Future of Service Management, 2016.
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