• International Journal of Technology (IJTech)
  • Vol 12, No 7 (2021)

Service Capital as a Condition for the Sustainable Development of Society

Service Capital as a Condition for the Sustainable Development of Society

Title: Service Capital as a Condition for the Sustainable Development of Society
Mark Khaykin, Olga Toechkina

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Cite this article as:
Khaykin, M., Toechkina, O., 2021. Service Capital as a Condition for the Sustainable Development of Society. International Journal of Technology. Volume 12(7), pp. 1458-1467

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Mark Khaykin Department of Economic Theory, Saint-Petersburg Mining University, 2, 21st Line, St. Petersburg 199106, Russia
Olga Toechkina Department of Foreign Languages, Saint-Petersburg Mining University, 2, 21st Line, St. Petersburg 199106, Russia
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Abstract
Service Capital as a Condition for the Sustainable Development of Society

The article deals with the essential nature of a new economic category – “service capital”. Its formation is the logical result of the beginning of the new stage of functioning of economic systems in a post-industrial society. The processes of sustainable development imply global laws governing global economy performance. The authors substantiate the idea that service capital is an economic category and should be studied by modern economic scientists. Most of all, it is connected with institutional theory and is most closely related to institutional capital as a form of manifestation of human capital. Institutional capital is transformed in conditions of an innovative-type service economy and takes the form of service capital. In contrast to institutional capital, it is characterized by some distinctive features discussed in this article. Service capital circulates in the service sector, the importance of which is constantly increasing at all levels of the economy: the mega-, macro-, meso- and microlevels. The article highlights the levels of functioning of service capital. The service capital of each level has sublevels, depending on the criteria chosen for their classification. The authors show that service capital is a special component of human capital. It is inseparable from its bearer, a person, and functions only together with other structural components of human capital. It is established that service capital has been introduced into all branches and sectors of the modern economy, so it functions as intersectoral and interindustry capital. Lastly, the directions of development of the theory of service capital are formulated.

Economic systems servitization; Human capital; Postindustrial economy; Service capital; service sector; Sustainable development

Introduction

Since the early 1990s, the Russian economy has been transformed according to the global patterns of development of the postindustrial society (Dyatlov, 2016). Some of them should be clarified here.

  1. Globalization of socioeconomic processes as a consequence of the general processes of the globalization of society (Feigin, 2015; Manyika et al., 2016). Human capital is becoming a universal economic category. The components of human capital and the relationship between them are gaining global significance. According to some scientists, this is connected with the effect that human capital has on economic development (Lapinskas and Makhova, 2019). Here, we would like to note that according to the Global Innovation Index (2020) data, the Russian Federation, compared to other economies in Europe, performs above average in one out of the seven global innovation index pillars – human capital and research. Investments in a person (in their education and upbringing, intellectual development, health, professional training, etc.) and the assessment of their socio-economic efficiency remain relevant at the intercountry and interregional levels of functioning of socio-economic systems of different levels (Sudova and Spiridonova , 2018).

2. Servitization of social production and consumption. The processes of the servitization of the economy are universal – that is, they are applied to all subjects of the economic life of society, including the end consumer (person), and have spread to several industries. For example, scientists only recently started using the notion “servitization of subsurface resource management” (Vasilenko et al., 2020a). The quality of life of the population in the service economy is largely determined by the quantitative and qualitative characteristics of the services produced and consumed, of which the end user is an individual.

3. Russia’s transition to the information stage of socio-economic development. Current research shows that, at present, an “intensive digital transformation” is taking place in many sectors of the Russian economy – for example, the oil and gas complex of Russia (Katysheva and Tsvetkova, 2019; Vasilev et al., 2020) or management (Lyukevich et al., 2020), though digitalization of the Russian economy seems to be a “long-term trend” and its impact on the industry will be seen only after 2025 (Razmanova and Andrukhova, 2020). Information in the modern economy is beginning to perform a multipurpose function (Brynjolfsson and Saunders, 2010; Nedosekin et al., 2019).

4.  Innovation of modern production (Hall and Rosenberg, 2010). The intellectual potential of economic entities, the human factor in the decision-making process (including an investment one), the growth of social capital and the efficiency of its use are becoming the determining factors of economic growth (Diebolt and Hippe, 2019). In this case, the “cementing tool” in the processes of the functioning of innovative production is human capital in its broadest, most comprehensive consideration (Chartered Institute of Personnel and Development, 2017).

In the process of production, development and use of individual and aggregate human capital, the processes of production and consumption of certain services are constantly taking place (Acemoglu and Author, 2012). Any violations or failures in these processes negatively affect the processes of expanded reproduction of human capital. At the same time, the service sector is considered with an extended interpretation. It seems appropriate to consider as services all those informal social interactions of agents of the institutional environment that the representatives of neoclassical economics (as opposed to the institutional ones) do not see as belonging to the field of economic activity (Brožová, 2015). The products mentioned above in the form of services are the result of not only the social interactions of agents but also their economic activities. There are two main reasons for this. First, the decision of agents to make certain interactions is in itself the fact of a certain choice made by them in the use of their own always limited resources (as a way to solve the main problem of the economy). Second, the very fact of performing certain forms and methods of social interaction is always associated with the achievement of certain goals of their participants, which directly or indirectly affect the resource capabilities of the agents of the institutional environment.

The constantly accelerating processes of servitization of economic systems in the context of the development of human capital of society initiate the formation and research of a new category of modern economy such as “service capital”. 

Conclusion

The development of the theory of service capital will allow the creation of a conceptual platform for determining the essential role of human capital in the sustainable development of modern society and identifying its new problems and contradictions. Several economic scientists have successfully substantiated a qualitatively new role of human capital in the conditions of the sixth technological order.

In our opinion, the new category of “service capital”, formulated for the first time by the authors of this article, opens a wide path for new research within the framework of theoretical and methodological substantiation of the role of service capital in solving eco- socio-economic problems and developing its tools.

In the context of the increasing intellectualization of production, which occupies a significant place in the service sector, and with the development of the knowledge economy, service capital becomes the most important factor and condition for the sustainable development of eco-socio-economic systems. Resource specialization of the national economy determines the special role of service capital, which ensures the progressive development of the basic component of the mineral resource sector of the economy.

The theory of service capital creates conditions for clarifying the role of the human factor in sustainable development in the context of modern challenges. The existing realities are such that only highly professional key management decisions of a systemic nature in the service sector and with its help are capable and should qualitatively change the economic structure at all its levels: the mega-, macro-, meso- and microlevels.

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