As discussed earlier, tertiary activities
revolve round the intangible outputs
which encompass a diversity of services
ranging from that of a technician or a plumber
to that of a restaurant chef or a lawyer, a teacher
or a computer operator. Services are usually
defined as �activities,� which are relatively
detached from material production and hence,
are not directly involved in the processing of
physical materials.
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Thus, they stand in contrast
to manufacturing, the product of which can
be seen in the form of goods. But how can we
measure the output of a plumber or a lawyer?
It is impossible to measure these outputs
except indirectly in terms of wages and salaries.
However, there are some services, which can
generate tangible output e.g. a fast-food
franchise. Nevertheless, measuring outputs in
services in general cannot be based on nature
of output. The main difference between
manufacturing and service products thus,
seems to be that the expertise provided by
services relies much more directly on workforce
skills, experience and knowledge than on
physical techniques embodied in machinery or
process of production.
SERVICES
Services are an important constituent of modern
economic development, which include retailing
and the sale of goods to the people, the provision
of services of all kinds � education, health and
welfare, leisure, recreation and business
services. Business services refer to those
services that enhance the productivity or the
efficiency of other firms' activities or that enable
them to maintain their specialised roles e.g.
advertising, recruitment and personnel training.
This sector was not given as much attention
earlier as was given to the production of goods.
In advanced economies, service-based
development has been very rapid. As statistical
data show, employment shifts continuously into
services in these countries.
In developing countries too, the service
sector is growing faster than the manufacturing
sector. Its contribution to national wealth is
also increasing. But the services are still very
poorly accounted because many people are
engaged in unorganised services, often referred
to as informal sector. The informal sector in
cities offers employment to a large number of
rural migrants, who are poorly paid especially
if they are unskilled. Then, there are
housewives and child labourers whose services
are not accounted.
During the development process, a normal
course of events takes place in most countries
over a period of time. There is a transition from
dominance of the primary sector, to the
secondary sector, and in the later stages, to the
tertiary and quaternary sectors. In some
countries, there is a tendency to delay the
decline of their manufacturing. Japan and
Germany, for example, are still able to
manufacture successfully for world markets
from a home base. Even in such countries, the
importance of manufacturing, in employment
and also as a proportion of GNP, declines
eventually. It is balanced by concomitant rise
of the service sector. This deindustrialisation
shift can be seen at the regional level too. In
the USA, this decline was first observed in New
England in 1950s and 1960s. Later in 1970s,
the middle Atlantic States of Virginia, Maryland
and Delaware were affected by this decline. The
industrial Mid-West faced it in 1980s. It is
supposed to be a predictable process, which
leaves behind a well of human skills,
organisations and offices.
The growing importance of services has now
given it an independent status as a productive
sector in the economy. Instead of being an
accessory to manufacturing or to the people
at large, it is an exporter. The competitive
advantage of some countries such as
Switzerland and the UK, and of some regions
or cities is in service provision.
Under the old thinking, there was a special
geographical pattern of industrial locations,
while services were distributed evenly matching
population distribution. As such there was a
precise geography of iron and steel making,
but banking might be found in every market
town even with a small population. These
services also organised in a hierarchy, placing
higher order services in the large city, and lower
order services in small areas. There was little
need for these services to agglomerate for
interaction among themselves. Now, however,
there are major concentrations of services. Some
of them are catering to new industrial
structures and needs such as advertising and
marketing. They have distinctive spatial
patterns. One of the most distinctive pattern is
that of global cities, located in relation to the
international economy. We will learn more
about them later in this chapter.
The major components of services may
broadly be grouped as the following:
(i) Business services include advertising,
legal services, public relations, and
consulting.
(ii) Finance, insurance and real estate
include savings and investment banking,
insurance and real estate (commercial as
well as residential).
(iii) Wholesale and retail trading links the
producers with consumers. Personal
services such as maintenance services,
beautician and repair work are also
included in this.
(iv) Transport and communications include
railways, roadways, shipping and airline
services and post and telegraph services.
(v) Entertainment such as television, radio,
film, and literature.
(vi) Government at different levels � local,
state and national includes bureaucracies,
police and army, and other
public services.
(vii) Non-governmental agencies include
those organisation which have been setup
by individuals or groups for charity
on non-profit social activities concerning
education, healthcare, environment,
rural development etc.
Employment in the service sector has
increased steadily in the developed countries
during the twentieth century despite low
population and significant job losses in
manufacturing. Compared
to manufacturing sector, it employs large
number of women. In general, the increase in
the services employment throughout the world
is attached to various reasons.
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AKHAND PRATAP SINGH
