The Netherlands' Drive to Build a Service Economy

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"We have to reinvent the entire business," she said. "This takes time and a huge amount of focus on the delivery model, pricing, and recruiting experienced talent, among many other things."

Empathize with customers

The use of greater customer empathy and design methods is critical to creating services that will be adopted. Because services are uniquely positioned to touch human lives, they need to be designed in a way that accounts for every encounter with the service. Designing services is also a question of systems innovation.

Think urban

Creative class representatives are key to bringing new services to life. The Netherlands has already recognized the value that these creative types add to economic growth. The livable and accessible city of Amsterdam has become a mecca for all sorts of design, branding, and marketing professionals, a "Go to" spot for creative talent. An additional benefit: Not only are these individuals important small business owners who drive employment growth, but their talent lures companies from all over the world to buy their services.

Provide tax credits

The U.S. government stubbornly retains the view that research and development tax credits should only be applied toward primary research of a purely scientific nature. In contrast, the Dutch government has broadened its scope for R&D tax credits to information- and communications-related service innovation. The Netherlands has recognized that information technology is one of the primary drivers of new services opportunities. Think of IT as the "factory" for services.

The Obama Administration and Congress should take this type of policy initiative to heart in their push to create new jobs. With the growth of services from 50% to 80% of GDP in the U.S. over the last 20 years, you'd think U.S. politicians would support some kind of incentive to update or create new IT systems, especially given the productivity enhancements that often result from such investment. At the same time, putting a few more information architects, programmers, and other Web 2.0 talent back to work wouldn't be a bad thing, either.

Capitalist purists might reject this type of government focus and attention on a segment of economic activity as a dangerous type of market "tinkering." Maybe, but lately having seen so many U.S. economic advantages vanish due to lack of attention, I must say the Dutch approach struck me as refreshing. While the U.S. is largely perceived as a leader in the services sector, it could clearly learn a few lessons from committed Dutch counterparts. They recognize that service innovation that especially leverages today's technological capabilities can really stir economic growth.

Download a PDF of Innovation Is Served, the report Van Der Hoeven published at the end of the conference, highlighting many key service-oriented themes.

Jeneanne Rae is the co-founder and president of Peer Insight, a consulting firm focused on services innovation and customer-experience design for S&P 500 firms. She has worked in the field of innovation and design for over seventeen years, consulting and educating dozens of leading companies in a multitude of industries. In 2005, BusinessWeek named Rae one of its "Leaders of the Year." .

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