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“The service economy is very well illustrated by two companies: Xerox and Michelin. Xerox is a company that manufactures and distributes office automation equipment (photocopiers in particular). Faced with resistance from its customers to invest in new expensive photocopiers, Xerox decided to no longer sell the machines, but to invoice each photocopy made. The same principle applies to Michelin, which, by observing resistance from its customers to the prices of new, more fuel-efficient tires, has decided to no longer charge for tires, but for the kilometers covered by its customers. Both companies no longer sell the products (photocopiers or tires), but rather the use of these two goods (photocopies or kilometers).”

It should be noted, however, that the development of the service economy depends on the prowess of the Internet, and we have previously demonstrated the role of digital platforms in economic activity. Indeed:

The Internet is not only the technical support for the transformations that give rise to the digital economy, it is also the driving force behind this new economy. (Brousseau and Curien 2001)

The service economy is considered as a new economic model that can change the relationships between economic players.

The question that challenges us is therefore: to what extent can this new economy contribute to the well-being of populations on an economic, social and environmental level?

The service economy is an economic model based on the substitution of the use of a good for its ownership, it is a solution that promotes the concept of “decoupling” between the added value created by economic activity and the consumption of energy and raw materials. “Decoupling is the breaking of the links between ‘environmental ailments’ and economic goods” (OECD 2004).

Decoupling is divided into two categories:

Relative and absolute decoupling. Relative or weak decoupling occurs when environmental pressures increase at a slower rate than economic growth; and absolute decoupling or strong decoupling occurs when the economic variable increases while environmental pressures stagnate or decrease. (Laurent 2011)

Conventionally, economic growth refers to the substantial increase in output measured by the macroeconomic aggregate known as GDP (gross domestic product). This increase also requires the intensive use of natural resources and energy, leading to environmental degradation through the overexploitation of resources and the formation of waste. The interest of decoupling lies in reversing the relationship between production and use of natural resources and energy.

Indeed:

Decoupling occurs when the wealth created (usually measured by gross domestic product) in an economy increases faster than the amount of natural resources used or consumed. The decoupling can be relative or absolute: in the first case, the amount of resources used or consumed continues to increase. In the case of absolute decoupling, the use or consumption of resources decreases while the wealth created increases. (Nicklaus 2017)

The service economy model novelty is that the creation of added value is not based on the company’s overall turnover, but on the optimal use of the good (Damesin 2013).

The objective of the service economy is to improve the well-being of populations. However, the concept of decoupling is considered in some research as a “myth”. Tim Jackson’s book sheds light on the impossibility of establishing an absolute decoupling between economic growth and the negative externalities generated by resource consumption. He argues that relative decoupling can be achieved with technological advances, but that absolute decoupling is out of reach, and would even be a dangerous illusion (Laurent 2011). Companies therefore request relative decoupling.

According to Jackson, absolute decoupling is out of reach and it can even be a dangerous pipe dream (Laurent 2011). As a result, the decoupling between economic growth, environmental impacts and resource consumption is imminent, even if pessimistic researchers persist. Despite this pessimism, relative decoupling is requested by companies because there is less pressure on them.

The service economy is thus defined and has been mobilized according to three referential theories, namely the service economy and cooperation (EFC), Product Service Systems (known as PSS) and the functional economy (this theory has been defined in the previous sections) (ADEME 2017).

The approaches used to explain the service economy have identified two economic models that are at odds with the industrial model of intensive growth. The “service-based” model and the “life cycle” model.

The service-based model marks the advent of an economic rationale based on the value in use of the good, whose added value is calculated in relation to the sale of the service derived from this good and not on the basis of the production and sale of this good.

In this context, ADEME (2017) defines this model as follows:

This logic corresponds to the development of service and customer relations that is focused on the useful effects and performance of usage of the resolution, mainly by valuing the intangible resources on which the company’s activity is based (skills, trust, organizational relevance, etc.).

It mobilizes beneficiaries, industrialists, local authorities and citizen-consumers in a co-production and long-term commitment dynamic. Innovation covers all aspects of the business model. This service-oriented logic aims to increase the value created and the quality of the offer, by eliminating the logic of production in volume associated with the reduction of unit costs.

To complete this model, which does not particularly consider the product life cycle, the life cycle model is used. The purpose of this approach is to improve the environmental performance of products:

It allows products to be designed differently by taking their environmental impacts throughout their life cycle into account. Thanks to this new look at products, this approach makes it possible to generate new ideas and be creative. (ADEME 2012)

The novelty in this concept is in “the technological evolution of the goods that are made available, in this case the extension of the lifespan of goods, and in the logistics put in place to ensure the closure of the physical flows of goods and materials. It requires the company’s business model to evolve” (ADEME 2017).

While the two models (service-based and life cycle) seem to be complementary, they nevertheless present some disparities.

Thus, the service-oriented logic aims for the performance of the use of the good and not just its availability in the hands of the customer. “Service-oriented logic is based on the company’s intangible assets.”

[This] intangible capital is essentially linked to the company’s competencies (professionalization of people, knowledge, know-how, etc.), the relevance of the company’s organization and offer (intangible and technological R&D, marketing, relevance of the integration of goods and services), trust between stakeholders (cooperation, reputation, internal and external communication) and the health of workers. (ADEME 2017)

The value of intangible factors in the company determines the success of a service strategy in the context of the service economy.

As for the life cycle logic, the company undertakes selling the use of the good, while remaining the owner. In this case, the company will not adopt a planned strategy of redundancy. It will be responsible for the maintenance of the assets, particularly if it manufactures them itself and manages them throughout their life cycle:

Extending the life of assets is not the only potential benefit. In theory, a looped management of assets will be facilitated. Manufacturers, retaining ownership of the products, will be able to reuse components and recycle materials to make new products. These practices will be encouraged all the more as the costs and risks of shortages of virgin raw materials are high. (ADEME 2017)

Even if you can approach the service economy with both logics, the life cycle logic is similar to the notion of the circular economy, unlike the service-oriented logic which has a tendency to replace the service economy.

Basically, the economy of sharing has been introduced by three theories: the free market and P2P economy, the giving economy and the service economy. The theoretical foundations of collaborative practices can also be placed in a religious context. Monotheistic religions all agree on the principle of sharing between humans and consider that giving part of one’s goods to the other is an act of faith emanating from a sensitive and virtuous soul.