Are Services Sick?

Services make up the lion share of modern developed economies. But their productivity developments have often been lagging. In this study, we investigate first whether increased digitalisation can actually improve productivity developments in the services sector and conclude that indeed it has strong effects. In a second step, we look into the factors driving digitalisation in the services sector. As a rule, the more competitive a sector is, the more likely it is to adopt digital technologies to improve its productivity.