Future of the Services Industry: In-Person or Digital?

Can the services sector remain so people intensive?

The services sector is one of the last remaining bastions of analogue culture. If it were an island, it would be one of the few places outside the grid; disconnected and somewhat isolated. At times it seems unclear whether its future will continue to be in-person or digital.

The majority of ‘services’ seem to exist in a quasi dial-up world. A perpetual state of, at best, ‘hybrid’.

When we think about business consultancy services we imagine people in offices crunching reams of data, delivering insightful, stat-ridden reports that get presented in swanky meeting rooms by senior partners.

When bringing to mind restaurants we imagine a well laid out physical space with people serving us exotic, perhaps slightly over priced food - but who cares, it's for the ‘experience’ and a night out from the kids!

When we plan going to the theatre we organise a night, surrounded by others, in a semi-circular or rectangular space, with hundreds of other people watching a handful of actors playing out a scene with a static backdrop behind them.

Going to a gig is exactly that: get in a car or a bus, go to a field (or another theatre) and try to get comfortable watching a band play ‘live’ from a far off stage.

We keep telling ourselves that in-person meetings, presentations, dining, performances and music is what it’s all about. But what if it’s not?

What if the services sector was to become entirely virtual? What if any consulting or outsourced service could be bought and delivered online. The full end to end, digital experience.

What if every meal was consumed remotely? What if every theatre production was viewed from the living room couch? And every live music gig enjoyed on the phone. This all appears to be a distant reality. A new future, for someone else.

But, you see, this is what the future will look like. Not because the current generation demands it, but because our future generation already lives in such a virtual world. As they become workers, managers and entrepreneurs, they will rapidly ring the changes.

Millennials in the U.S. spend on average 4 hours per day online. This once youthful demographic has grown up and today they represent the bulk of white collar workers and middle managers. Tomorrow they will run companies and lead public sector organisations.

At the same time, according to Common Sense Media, teens spend an average of 9 hours a day online. Today's teens and young adults are called generation Z, and these post-millenials are entering the workforce (the oldest gen z’ers are 22).

The reason for the almost doubling of time spent online by generation Z over millennials is because the latter grew up, from a very young age, with high speed broadband, smartphones, tablets, YouTube and Spotify.

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They live in a virtual world and this is the environment they are the most comfortable in - period.

TV has moved online. Social networking has become the norm. Friends hang out together in virtual spaces.

As they enter adulthood generation Z will demand that fine dining is delivered to their homes or recipes explained virtually, ideally with interactive 3D. They will enjoy gigs with friends just like they play multi-player games. Indeed, they will expect virtual multi-player, multi-participatory everything, from football games to live theatre to business building and museum visits.

They will want to buy legal services from an online store, and they’ll want the basic legal documents templatised, with add-on support delivered virtually in pre-paid packages.

They will look to Xero and Quickbooks to do their accounts and tax filings, and not just provide the software that organises it. They will want the software AND the accounting service fully automated, for an annual fee. Computers will do what accountants have been doing for centuries.

Computers have already learned how to do most manual tasks better than us humans.

The new consumer will only want to vote, register or have anything to do with government as long as they can do it digitally. They will expect routine, non threatening health checkups and cures to be provided virtually.

They will only buy business services over the web. No more time spent in cool ad agency offices. Google, Facebook and YouTube will provide fully automated ads and everything we require to run our own integrated campaigns.

The new workers will question how they can effortlessly learn, play, date and message in-app, but can't quite get the same level of instantly satisfied virtuality into their various business dealings.


As millennials edge towards their 40’s and become the new generation of company leaders, and gen Z heads into the workplace - together they will change the way we work and live in the next decade.

The hybrid world that we exist in today with online and offline retail, streaming and live music, physical and virtual conferences will prove to be a hybrid moment in time.

The future will be online only. The sooner the services sector gets on board with this new reality the longer they might survive. But time is ticking.

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