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Le 24 février 2022

Soutenance de thèse de Edouard RIBES

Economie des services professionnels

Résumé de la thèse en français

This PhD provides an up-to-date view of the mechanisms at play in the transformation of the professional services industry. It first explores the dynamics that have sustained and keep on sustaining the growth of the associated industry (through a mix of theoretical modelling and empirical analysis) and highlights that survival in this industrial realm is now a question of adaptation to deliver services at scale. As the speed at which professionals get trained exceed the speed at which the economy develops, supply in professional services indeed tend to exceed the associated demand leading to a consistent price reduction of 1 to 2% per year. This thesis then discusses the two key instruments available for such firms: namely labor displacement off/near-shore and labor replacement thanks to automation technology. This discussion is informed by a mix of empirical analysis (survey, regression analysis) which is latter used to propose a view of the end state of the sector (by means of a mean field game analysis). Key results (on selected professions) show that: • Labor replacement and displacement appears to only be a concern for firms above a certain size (several M$ of annual revenue) • Labor displacement may actually lead to the off/near-shoring of 20 to 30% of today's professional services activities • Only a subset of activities that can be done remotely can be displaced (due to the interdependency between activities. • Activities that can be displaced can also be replaced as they mainly encompass routine tasks. • So far, investing in off/nearshore practices appears profitable, but investing in technology appears to be profit neutral as it leads to a shift in the resource mix needed to operate the firm. Finally, this thesis investigates the implications of such a transformation on professional services human resources practices (apprenticeship paradigm, promotion rules & employees compensation & incentives). It notably shows that: • labor displacement and replacement tend to pressure the traditional apprenticeship model (the hierarchical up or out model) which was put in place to incentivize professional services workers and to lead to the emergence of side career tracks (the “up and going nowhere”) • labor displacement and replacement lead to a polarization of wages. While apprentices compensation goes down by 1 to 2 points for every percent of activity which gets replaced/displaced, experts (partners/firms owners) see their compensation increase.

Résumé de la thèse en anglais

This PhD provides an up-to-date view of the mechanisms at play in the transformation of the professional services industry. It first explores the dynamics that have sustained and keep on sustaining the growth of the associated industry (through a mix of theoretical modelling and empirical analysis) and highlights that survival in this industrial realm is now a question of adaptation to deliver services at scale. As the speed at which professionals get trained exceed the speed at which the economy develops, supply in professional services indeed tend to exceed the associated demand leading to a consistent price reduction of 1 to 2% per year. This thesis then discusses the two key instruments available for such firms: namely labor displacement off/near-shore and labor replacement thanks to automation technology. This discussion is informed by a mix of empirical analysis (survey, regression analysis) which is latter used to propose a view of the end state of the sector (by means of a mean field game analysis). Key results (on selected professions) show that: • Labor replacement and displacement appears to only be a concern for firms above a certain size (several M$ of annual revenue) • Labor displacement may actually lead to the off/near-shoring of 20 to 30% of today's professional services activities • Only a subset of activities that can be done remotely can be displaced (due to the interdependency between activities. • Activities that can be displaced can also be replaced as they mainly encompass routine tasks. • So far, investing in off/nearshore practices appears profitable, but investing in technology appears to be profit neutral as it leads to a shift in the resource mix needed to operate the firm. Finally, this thesis investigates the implications of such a transformation on professional services human resources practices (apprenticeship paradigm, promotion rules & employees compensation & incentives). It notably shows that: • labor displacement and replacement tend to pressure the traditional apprenticeship model (the hierarchical up or out model) which was put in place to incentivize professional services workers and to lead to the emergence of side career tracks (the “up and going nowhere”) • labor displacement and replacement lead to a polarization of wages. While apprentices compensation goes down by 1 to 2 points for every percent of activity which gets replaced/displaced, experts (partners/firms owners) see their compensation increase.

Titre anglais : Economics of professional services
Date de soutenance : jeudi 24 février 2022 à 14h00
Adresse de soutenance : Mines paris, 60 Bd Saint-Michel, 75272 Paris - V116
Directeur de thèse : Pierre FLECKINGER

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