Business services are the non-product based activities that help companies to accomplish their trade and production. They are a subset of economic services which also includes all work that does not result in the sale of a physical good or service, such as accounting, information technology and human resources management. In addition, they are often grouped with other miscellaneous assistance provided to organizations, such as cleaning and catering services.
Many different types of business services are available, and the choice depends on a company’s needs. Some examples include human resource management, consulting, accounting, logistics, and information technology. Others are more specific to a particular industry or type of client. For example, a law firm might provide business services to other lawyers, or it may offer training programs to its own employees. A business services company might be able to help a firm find the best candidates for a job opening, or it could assist with payroll processing and billing.
Some business services are provided to businesses that sell a tangible product, such as a marketing or advertising agency, a design studio, or a printing house. This is known as business-to-business (B2B) services, and it is a very important part of the economy. Other business services are sold to consumers and are known as consumer-to-business (C2B) services. These are less common and can include beauty or hair salons, home health care, personal trainers, or cleaning services.
A large number of business services are provided by small and medium-sized enterprises (SMEs). This is partly due to a trend towards outsourcing these activities, but it also results from the fact that SMEs are more likely to use business services than larger corporations.
The growth of the business services sector is driven by technological advances, new communication infrastructures, and a shift from traditional manufacturing to value-added activities. The EU Internal Market legislation and policies allow the provision of business services across borders, stimulating competitiveness.
The business services supersector is the largest of all service industries and accounts for 11% of the EU GDP. It is particularly important to Europe’s global competitiveness, and there are growing opportunities for innovation in this area. A key challenge is to enhance the value of services through new combinations of goods and services, while reducing costs. This will require the development of new skills, the use of innovative IT solutions and the promotion of more efficient forms of business organisation. It will also involve closer cooperation between companies and public authorities. The European Commission is focusing on this through the Services DirectiveEN***, and a number of other initiatives.