ABSTRACT
It has frequently been noted that the shift to services in the advanced industrial economies involves a widening and deepening of the social (and relatedly technical) division of labour. As far back as the 1920s, Allyn Young, with a nod in Adam Smith’s direction, observed that the social division of labour depends upon the extent of the market and that greater specialisation leads to productivity increases which, in turn, stimulate economic growth. The greatest advantages delivered by an expanding division of labour among industries are to be had by using labour in ‘roundabout’ or indirect ways. Put another way, specialisation may secure more efficient, possibly cheaper, ways of doing things, as well as providing novel, more innovative ways of doing them (Young 1928). Today, this is the language of subcontracting, externalisation or outsourcing, where firms-both manufacturing and services-tend to concentrate on their ‘core’ activities and buy in what else they require to keep the operation going.
