Servicedominated

Service-dominated is a term used to describe economic and organizational configurations in which services account for the majority of value creation, employment, and economic activity, rather than goods-producing sectors. In a service-dominated framework, intangible assets, customer interactions, and knowledge-based activities are central to value formation, and firms often compete through service delivery, experience, and outcomes rather than through physical products alone.

Common indicators of service-dominated economies or firms include the share of services in gross domestic product and employment, rising productivity in service sectors, and the prevalence of service-intensive business models such as maintenance, outsourcing, professional services, software as a service, finance, and logistics. The shift toward services is driven by factors including digitalization, globalization, improved information flows, and the commoditization of physical goods, which pushes firms to differentiate themselves through service ecosystems, customization, and integrated solutions.

The term is sometimes used in contrast to goods-dominated models and, in academic literature, is closely related to service-dominant logic (SDL). SDL, developed by Vargo and Lusch, treats service as the fundamental basis of exchange and emphasizes value co-creation with customers and the mobilization of operant resources (knowledge, skills) rather than mere operands (tangible goods). While related, the economic concept of service-dominated describes structural characteristics of economies or firms, whereas SDL provides a theoretical lens for understanding value creation in services.

Implications of service-dominated structures include policy emphasis on human capital and digital infrastructure, and business strategy shifts toward service-based offerings, subscriptions, performance-based contracts, and platform-enabled ecosystems. Limitations include varying productivity across service sectors, wage dynamics, and measurement challenges in capturing intangibles.