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Embracing the Self-Service Economy

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Embracing the Self-Service Economy Embracing the Self-Service Economy DANIEL CASTRO | ROBERT ATKINSON | STEPHEN EZELL ITIF The Information Technology & Innovation Foundation APRIL 2010 Embracing the Self-Service Economy Daniel Castro Robert Atkinson Stephen Ezell April 2010 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION Table of Contents I. Executive Summary ........................................................................................... 1 II. Introduction ......................................................................................................... 3 A. What is self service? ................................................................................ 4 III. Benefits of self service ...................................................................................... 4 A. Benefits for consumers ........................................................................... 4 B. Benefits for businesses ............................................................................ 5 C. Benefits for the economy ....................................................................... 6 IV. Types of self-service technology ...................................................................... 7 A. Electronic kiosks ..................................................................................... 7 1. Banking .............................................................................................. 7 2. Self-service gasoline stations .......................................................... 8 3. Self-pay parking, tolls, and transit ................................................. 9 4. Food-ordering kiosks ...................................................................... 9 5. Airport and travel kiosks ..............................................................10 6. Vending machines and “reverse” vending machines ................ 11 7. Self checkout ..................................................................................12 8. Retail kiosks ....................................................................................13 9. Human resources kiosks ...............................................................15 10. Digital photograph printing .......................................................15 11. Postal kiosks .................................................................................16 12. Electronic voting..........................................................................16 13. Health care kiosks ........................................................................17 14. Information kiosks ......................................................................17 B. Internet Applications ............................................................................18 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | APRIL 2010 PAGE I THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION 1. Online health .................................................................................18 2. Online banking ..............................................................................18 3. E-learning.......................................................................................18 4. Professional services ....................................................................19 5. Retail e-commerce ........................................................................20 6. Customer service ..........................................................................21 7. Online customization ...................................................................22 8. Access to government services...................................................23 9. Ticketing and reservations ...........................................................23 C. Mobile devices, including smart phones and smart cards ...............24 1. Smart phones .................................................................................24 2. Mobile payments ...........................................................................25 3. Smart cards ....................................................................................27 4. Mobile self-service in the developing world .............................28 D. Phone Applications ...............................................................................29 V. Impact of labor cost on self-service technology adoption ..........................30 VI. Responding to concerns over self-service ....................................................31 A. Concern: Self-service simply shifts work to the consumer............. 31 B. Concern: Self service eliminates consumer choice and robs individuals of human contact ......................................................31 C. Concern: Self service destroys jobs ....................................................32 D. Concern: Even if self-service boosts productivity, workers will not benefit ...............................................................................................34 VII. Policy Recommendations ................................................................................34 A. Resist and overturn policies that restrict business use of self-service technologies .....................................................................................34 B. Support “prosumer” technologies like broadband, electronic IDs and mobile payment systems ........................................................36 C. Encourage greater government use of self-service technology ..... 37 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | APRIL 2010 PAGE II THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION D. Support creation of a Center of Excellence for Accessible Design in IT-enabled Self Service ............................................................37 E. Increase the minimum wage in order to boost self-service technology adoption ......................................................................37 F. Provide stronger safety nets for workers adversely affected by technological change ......................................................................38 VIII. Conclusion .......................................................................................................38 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | APRIL 2010 PAGE III THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION List of Figures and Tables Figure 1: Estimated average bank transaction costs, by technology ..................... 6 Figure 2: ATM Deployment in the United States, 1994-2008 ............................... 8 Figure 3: Self-boarding gate at the Paris-Charles de Gaulle Airport ...................10 Figure 4: eCycling Station from ecoATM ...............................................................11 Figure 5: Self-checkout terminals deployed by region, 2008. ...............................13 Figure 6: Cost of HR application, self-service vs. manual ...................................16 Figure 7: E-commerce retail sales as a percent of total sales, 2000-2009 .......... 20 Figure 8: Anna, the IKEA online assistant .............................................................21 Figure 9: Implementation of e-ticketing for air travel worldwide, 2006-2009 .. 24 Figure 10: Electronic boarding pass on an iPhone. ...............................................25 Figure 11: Mobile NFC Payment at a Japan Railway Station ...............................26 Table 1: Deployment of Contactless Fare Payment in U.S. Mass Transit. ......... 27 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | APRIL 2010 PAGE IV THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION Executive Summary he past decade has witnessed a rapid growth in self service We estimate that if that allows consumers to take on the traditional role of a self-service technolog y service worker in the provision of a service. Self service has were more widely T long existed—think of placing a call by dialing a telephone instead of deployed, the U.S. using a telephone operator or pressing a button in an elevator instead economy would be of using an elevator operator—but its importance has grown as ad- approximately $130 vances in information technology (IT) have created many opportu- billion larger annually, nities to leverage self-service technology for large gains in efficiency the equivalent of an additional $1,100 in and convenience. Using computer kiosks, airline travelers check in to annual income for every their flights; on the Internet, consumers purchase products without household. ever speaking to a sales agent; and, using a mobile phone, customers check their bank balances and transfer funds. Self-service technology continues to become more efficient and more convenient, and, as a re- sult, increasingly organizations, including businesses, non-profits and governments, are using self-service technology to operate more pro- ductively and to better serve their customers. Self-service technology has already a major force for growth in productivity transformed entire industries, from and improvements in quality of life. We ATMs in banking to e-commerce in the estimate that if self-service technology travel industry, resulting in significant were more widely deployed, the U.S. savings for businesses which are passed economy would be approximately $130 on to consumers in the form of lower billion larger annually, the equivalent of prices and better service. However, an additional $1,100 in annual income even though self-service technology has for every household. generated a wide range of benefits and savings for consumers, businesses, and These savings could not be
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