| Summary: | The success of individual firms can illustrate lessons learned from economy-wide research on how public policy and private company policy affect the development of the services sector. This review of some 14 case studies of large international services firms shows that three factors are common to their success: (1) Many successful services companies examined owe their existence and success to the opening up of markets; (2) The opening up of markets enabled new entrants to take another step towards success, namely innovation. Such innovation - either in terms of processes or products - helps firms to differentiate themselves from other, often more traditional, firms. The strong focus on innovation is often associated with an important role of venture or risk capital. In many cases, successful services firms were also pioneers in introducing information and communication technology (ICT) and developing other key technology applications; and (3) A motivating work organisation. Firm case studies also highlight the importance of factors internal to a firm, notably the organisation of work, entrepreneurial management, the motivation of workers, and the company culture. These factors differ considerably across firms, but may include the decentralisation of responsibilities and flat hierarchies, compensation according to performance or compensation aimed at achieving worker loyalty (e.g. through profit sharing or stock options). Public policies related to innovation, ICT or work organisation, are important for company success in many cases, but almost always in a context of open and contestable markets
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