Productivity of the Services Sector in the Economy of Iran and Methods for Its Promotion

Document Type : Research Paper

Authors

Assistant Professors, Bu Ali Sina University

Abstract

This paper argues productivity growth in Iran’s services sector: issues and measures. Services sectors comprise about 50 percent of GDP and employment in the economy of Iran. For sustainable development of Iran’s service companies, it is important for organizations to deliver services and broaden their examination of productivity from the conventional organization-oriented perspective to a dual organization–customer perspective. Productivity shows whether the activity of an organization is efficient and effective or not. The quality aspect in manufacturing is not gauged because input and output are measured by quantity units and quality remains the same. The quality in service sector is also very important.
Service sector input elements such as materials, machines and energy are not as important as in manufacturing input. The main element in service sector is labor because service sector is more personnel-intensive comparing to manufacturing. Furthermore, in determining productivity of service sector, we must evaluate output and input elements in quantity and quality. Quality of service sector is analyzed in humanistic and technical aspects. Therefore, output consists of a total service offered in terms of quality, and the input includes both tangible and intangible elements.
The analysis of data shows that the productivity in service sector is low as compared to the other economic sectors in Iran. In this context, it is needed to know the productivity increasing limitations in the Iranian service sector and how we can deal with them. To achieve this, productivity analysis is done by using DEA approach.
 

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