The sector tertiary, or service sector, is the segment of the economy that provides services to its consumers, which are both individual citizens and companies, or public or private institutions, among others. It is based on producing services instead of final products.
It is one of the three types of industry in a developed economy. The other two are the primary industry, or raw materials, and the secondary, or production of goods..
Some tertiary industries have close links with primary and secondary industries. As an example, fishermen rely on meteorological services to determine what the weather conditions will be like.
Tertiary industries thrive where there are large groups of people, which is where you get the most business. Thus, many people need the tertiary sector for their daily lives.
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In the last 100 years, developed economies have seen the transition from an economy based on manufacturing to one where the tertiary sector or service sector dominates..
A growing tertiary sector is usually a sign of a higher standard of living, as it allows consumers to enjoy more leisure-based service activities, such as tourism, sports and restaurants.
In a developed economy like the UK, the service sector is the largest component of the economy, comprising almost 80% of GDP and a similar share of employment. In the United States, the service sector comprises 70% of the workforce.
The tertiary sector of the industry implies the provision of services to other companies, as well as to final consumers.
The tertiary sector constitutes the vast majority of employment opportunities. Focuses solely on providing services and not products to consumers and other organizations.
The term can be used to describe a single service-oriented organization or the industry segment as a whole..
Products can be transformed during the course of service provision, as is the case in the restaurant industry. However, care focuses on the people who interact and serve the customer, rather than the transformation of physical products..
Services, also known as intangible products, include care, advice, access, experience and affective work.
Service providers face obstacles in selling their services, which product sellers rarely face. Services are intangible, thus making it difficult for potential clients to understand what value it will have for them and what they will receive..
In fact, some providers such as investment advisers do not provide guarantees of value for the price that has been paid..
Selling services can often be challenging compared to selling a specific product. Because products are tangible, it's easy to price them. On the contrary, being intangible, it can be difficult to value a specific service.
Service differentiation is often difficult. For example, under what criteria can one investment adviser be preferred over the others, because they are often seen as offering a seemingly identical service.
While a manufacturer can use simplification, technology, and other techniques to lower the cost of the products it sells, the service provider often faces an unforgiving pattern of rising costs..
Since the quality of most services depends largely on the quality of the people who provide those services, and can vary according to the skills and personalities of the people, the cost of personnel is usually a high portion of the costs of the service.
Charging an additional premium for services is only an option for more established businesses, which charge a premium based on brand recognition.
The tertiary industry provides services as well as operational frameworks for business operations.
Currently, the economic activities of the tertiary sector make it one of the most competitive sectors in the world, thanks to the strong reduction in communication costs, improved speed and reliability in the transport of people and products, as well as access at the information.
Personal services, ranging from haircuts to tattoos, can be included along with animal services such as pet groomers, animal breeders, and stray animal care facilities.
- Furniture and household items.
- Wood and other building materials.
- Office equipments.
- Medical, dental and hospital equipment and supplies.
- Home appliances and electrical and electronic items.
- Agricultural and garden machinery.
- Sporting and recreational goods.
- Motor vehicle and parts dealers.
- Furniture and home goods stores.
- Electronics and appliance stores.
- Supermarkets and specialty stores.
- Air, rail, water and truck transport.
- Postal service, express parcel services and courier.
- Passenger land transport: taxi services, bus and metro systems.
- Legal, accounting, architectural, engineering and marketing consulting services.
- Movies and sound recording.
- Telecommunications.
- Data processing and hosting.
- Hospitals and clinics.
- Doctors offices.
- Outpatient care centers.
- Medical and diagnostic laboratories.
- Veterinary services.
- Hotels and resorts.
- Special food services.
- Places to drink.
- Restaurants.
- Banks.
- Investment brokers.
- Insurance.
- Cinemas and theaters.
- Event and exhibition rooms.
- Casinos.
The service sector plays a vital role in the development of a modern economy. In fact, this sector is so vital that the overall performance of an economy depends on the performance of the tertiary sector..
The main cause of the service economy is the increase in family income, which allows them to reach higher levels of consumption in health services, education, insurance, transportation, among others..
This change in consumption patterns is reflected in the economy's output. In addition, the tertiary sector has served to:
The development of industries depends on the performance and improvements of a country in transportation, communication, electricity, banking, etc..
The transportation system helps to transport raw materials, finished products, and workers to their required destination. Communication helps to expand the market for industrial products. Additionally, electricity and banking services help industries in remote areas thrive..
The service sector helps develop agricultural production by providing better facilities in the agricultural network. Helps transport raw materials and finished products from one place to another.
This sector offers a well-organized transport and communication service. It also provides sufficient banking services along with the expansion of educational and medical facilities in the backward regions of the country..
Therefore, it helps to eliminate the problem of regional imbalances and disparities within the country..
Better services in the areas of transport and communication, banking and insurance, education and health, etc. should help a country pave the way for economic development by increasing the quality of life within the country.
This sector helps the workforce by providing sufficient technical education in addition to adequate medical facilities. In addition, a well-organized transport network and communication system increases mobility and information among workers..
All this makes the worker more skilled and efficient and, therefore, productivity will increase simultaneously.
A well-developed service sector, especially in transportation, banking, and communications, helps expand international trade. Therefore, it will also help to increase the reserve of foreign exchange within the country..
It is an online retail company that sells products such as books, electronics, clothing, appliances, or crafts, among others. It is considered the largest online retailer in the world and sells around almost the entire world, having portals in the United Kingdom, Canada, Japan, China, France, etc..
It is a multinational group that designs and sells ready-to-assemble furniture, kitchen appliances, and also home accessories, among other useful products. It has been the world's largest furniture retailer since 2008. It has become a globally recognized brand.
It is an American company for rental of apartments and experiences. Members can use the service to stay or offer accommodation, mainly homestays or tourist experiences. The company does not own any of the properties on offer nor does it organize events. It simply acts as a broker (intermediary), receiving commissions from each reservation.
The audiovisual company's core business is its subscription streaming service, which offers online streaming of a library of movies and television shows, including those produced in-house. As of April 2019, Netflix had more than 148 million paid subscriptions worldwide, of which 60 million users were from the United States..
The company also has offices in the Netherlands, Brazil, India, Japan or South Korea..
They are American multinational hospitality companies that manage and franchise luxury hotels, resorts and also vacation properties. The attraction for the client is that their rooms will be the same in terms of services and characteristics, no matter in which country the hotel is located..
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