Service Systems Innovation and Ricardo’s Law

Service system innovations cannot change just one thing (systems thinking/design thinking).

Changing technology changes people’s skills and interaction patterns.

Changing people’s skills often impacts rules, rights, and responsibilities.

Changing rules, rights, and responsibilities often impacts customer and provider expectations and experiences.


One of the most fundamental laws of Economics and Service Science is Ricardo’s Law of Comparative Advantage.


To me, Richardo’s is non-intuitive, surprising, and helps explain why there are so many service system entities in the world…

Benefits abound when entities

do a little bit more of what they are good at,

and a little less of what they are bad at,

and then use exchange to make up “the difference” in personal needs and wants…


Combine Richardo’s Law with learning curve benefits and technology automation benefits for routine actions,

and you get a ratchet-ing up of capabilities of entities that follow this simple rule…

so both co-creation of value and co-elevation of capabilities for entities that interact according to the simple rule

This is a fundamental observation of service science about the nested, networked service ecology and how it evolves over time…


Linking these concepts is also important:


“Civilization advances by extending the number of important operations which we can perform without thinking of them.”
Alfred North Whitehead, English mathematician

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