Economic Geography

9
On services and economic
geography
Peter W. Daniels
Introduction
Service industries are everywhere, yet nowhere, in economic geography. Adam
Smith and other classical economists promulgated the notion that service work-
ers lack economic and social productivity. This has permeated writing and think-
ing about service industries and the economy to this day with ‘the result that
there is, scattered about in the literature, a sizeable number of writings that
contain sharp insights but that, taken without careful analysis and interpretation,
may appear confusing and even contradictory’ (Stanback, Foreword to Delaunay
and Gadrey 1992). Its impact is reflected in the visibility of services in contem-
porary economic geography; a quick scan of the contents list of some of the
major recent collections of writings within the sub-discipline amply demonstrates
the point (Barnes et al. 2004; Clark 2001; Sheppard and Barnes 2003). Apart
from a seminal paper (Walker 1985) included in Barnes et al. (2004), papers
directly focused on services as a distinguishable category of economic activity are
notable by their absence. Yet they are almost certainly implicated in, for exam-
ple, the numerous contributions to the discourses on realms of production,
resource and social worlds, or global economic integration that populate each of
these volumes.
Such an observation will probably be greeted by colleagues as yet another
example of the paranoia among the small band of those interested in the
economic geography of services about the neglect of these activities in main-
stream research and writing. This phenomenon (if that is what it is) is not of
course confined to economic geography; it applies in equal measure to urban
geography, regional science, economics, or management and business studies.
Given that this situation has been going on for at least 35 years (and probably
longer) it may not serve any useful purpose to ponder the reasons, yet it might
be argued that economic geography is the poorer for not explicitly incorporating
service producing and service consuming activities within the philosophical, theo-
retical, methodological and other dialogues that characterised the sub-discipline
during this period.
Another part of the services’ identity crisis is the veracity of the distinction
between manufactured goods and services. The widely cited observation by

---

Marshall (1961: 56) that ‘Services and other goods which pass out of existence in
the same instant that they come into it are, of course, not part of the stock of
wealth’ is noted. But Greenfield (1966) observes that later in the same treatise
Marshall (1961: 63) states that ‘Man cannot create material things’ and
concludes that ‘all productive activities consist of services applied to pre-existing
physical materials’. This is not too dissimilar to arguments and analyses made later
by Riddle and others as the debate continued (Bacon and Eltis 1976; Cohen 
and Zysman 1987; Crum 1977; Riddle 1986). The absence of a clear cut distinc-
tion between goods and services is a recurring theme that imbues debates about
the place of producer services in economic thinking, their relationship with the
appearance of, and demand for, human resources with new and different skills,
and a call for moving towards a new view of services (Daniels and Bryson 2002;
Marshall et al. 1988). The term ‘productive consumption’ was used by Marx (1973)
to represent the notion of significant interdependence between manufacturing
and services; a product such as a washing machine, for example, only becomes 
‘a real product’ when it is used for the purpose for which it has been designed
(see also Bryson et al. 2004: 160–2).
Notwithstanding this evident lack of confidence, it is of course the case that
there has been a long tradition of selective analysis of certain services, notably
retailing, air transport, shipping and ports, tourism, office development and this
has continued to the present but with different emphases; for example financial
services, management consulting, advertising services or business and profes-
sional services more broadly defined. Research has also become more inter-disci-
plinary but, as a broad generalisation, each type of service activity is examined in
its own right (operation, location, land use impacts, internationalisation) rather
than as part of a common set of activities (services) that interact with, and exert
influence upon, other common sets of economic activities (manufacturing,
resource extraction, commodities production).
Given that ‘service activities comprise very heterogeneous products, 
functions and occupations . . . and . . . a general approach would not result 
in meaningful explications’ (Ochel and Wegner 1987) such fragmentation may
be understandable and even inevitable. Nevertheless, during the last decade or
so there has been a perceptible shift towards a more holistic approach (Bryson 
et al. 2004). Whether the stage has been reached where it ‘is no longer necessary
to begin any discussion of services research with a complaint about their neglect’
(Marshall and Wood 1995) remains a moot point. At about the same time as 
the comment by Marshall and Wood it was also noted that ‘in the universe of
not-understood phenomena, service activities form one continent, only slightly
explored from different angles’ (Illeris 1996). This perceptive comment reflects
Illeris’s view that the youthfulness of service industry studies has precluded
(economic) geographers from formulating a general theory of services; it 
has been necessary for them to work with, or draw upon, researchers in other
disciplines to initially achieve a general understanding of services and 
their contribution to the transformation of economy and society in the late 
twentieth century.
On services and economic geography
113

---