Role Of Tertiary Sector In Economic Development – Definition – The service sector consists of companies that provide “intangible goods” such as entertainment, retail, insurance, tourism and banking. The service sector will use manufacturing, but there is an additional component of providing service to customers.

A coffee shop that sells coffee is an example of a service sector. Raw materials (primary sector) are being used: coffee beans and manufactured products (cups and plates and coffee machine).

Role Of Tertiary Sector In Economic Development

In a developed economy like the UK, the service sector is the largest component of the economy, accounting for almost 80% of GDP and a similar proportion of employment. In the US, the service sector accounts for 70% of the workforce.

Growth Of Services Sector In India

Over the past 100 years, developed economies have transitioned from a manufacturing-based economy to one dominated by the “service sector” or “third sector”. Tertiarization leads to the service sector becoming the largest element of the economy.

A growing service sector is often a sign of rising living standards: consumers are able to enjoy more leisure-based service activities such as tourism, sports and restaurants.

1. Improve work productivity. A key factor in outsourcing is improving labor productivity. Better technology and improved labor productivity have allowed manufacturing and agriculture to produce more with less labor. This increase in productivity has brought the following:

2. Globalization. Globalization and free trade have allowed the UK, USA and developed economies to import more manufactured goods. Therefore, a greater proportion of the economy can be allocated to the higher value service sector. Although the UK has lost its comparative advantage in manufacturing goods, it makes up for it by specializing in the services sector, such as finance and banking.

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3. Income elasticity of demand. As our income increases, we spend a greater percentage on luxury service items such as vacations, going out to restaurants. Manufactured goods are more income inelastic. As our incomes rise, we spend a little more on household goods, but as we get richer, we’ll pay someone to wash the car and go out for a meal rather than buy the ingredients and cook it ourselves.

UK real GDP since 1955. The increase in national income has led to an increase in the standard of living. This has allowed consumers to spend more on services in the service sector.

The increase in the real wage has allowed the average working week to decrease. In 1850, the average job took 60 hours, leaving little time for leisure. (most people worked a six-day week). By 2009, that average work week has dropped to 32 hours, leaving more hours for leisure time.

New technologies have made it possible to develop new industries in the service sector. Computers and phones have developed over the past 100 years. The growth of the Internet has enabled a new range of tertiary services. Companies can be classified (grouped) in different ways. One way is to group by INDUSTRY. Retail Industry Education Industry Agriculture Industry These industries are often grouped into three sectors: PRIMARY EDUCATION SECONDARY EDUCATION

Solution: Class 10 Sectors

4 The primary sector The primary sector is the part of the economy that grows, collects, exploits or cuts raw materials. Other goods and services require raw materials: wheat, pork, fish, wood, coal, oil and gas. . .

The Second Sector is that part of the economy where companies take the raw materials produced in the First Sector and turn them into goods. Goods are physical products that can be seen + touched.

The Third Sector is the part of the economy where companies produce services. Services are non-physical products that cannot be touched or stored, like a haircut or a train ride

Production chain The production chain is the different stages of production that a product goes through before it is sold to a consumer.

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In developing countries, primary industry employs more people than secondary or tertiary industries. These are usually countries where the secondary industry has recently been established. As most people still live in rural areas with low incomes, there is little demand for the tertiary industry. In developed countries, secondary industries were established many years ago. The secondary and tertiary sectors are likely to employ many more workers than the primary sector. In developed countries it is common to import manufactured goods from elsewhere. Most of the workers will work in the third sector. Industrialization- The development of industries in a country or region on a large scale Deindustrialization- Occurs when the secondary, manufacturing sector of a country declines in importance.

Deindustrialization: A country is moving from the second sector to the third sector. In both cases, these processes earn the country more revenue.

All companies belong to the private sector. No government intervention. Advantages: Consumers have a lot of choice High motivation for employees Competition keeps prices low An incentive for other businesses to start up and make a profit

Disadvantages: Not all products will be available to everyone, especially the poor. Lack of government intervention means uncontrolled economic booms or busts Monopolies could be established limiting consumer choices and exploiting them.

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All companies belong to the public sector. Total government intervention. Fixed salaries for all. Private property is not allowed. Advantages: Eliminates the waste of competition between firms (eg advertising the same product) Employment for all All needs are met (even if no luxury goods)

Little motivation for workers Government can create things people don’t want to buy Little incentive for companies (no profit) leads to low efficiency.

14 Mixed economy: Companies are from both the private and public sectors. The government controls part of the economy. Government owned industries: health education defense public transport water and electricity

Privatization is the government selling national businesses to the private sector to increase production and efficiency. Advantages: New incentives (profits) drive business to be more efficient Competition lowers prices People have more capital than government Business decisions are for efficiency, not government reputation Privatization raises money for government

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Employees could be fired for the sake of profits. Firms could become monopolies, causing the price to rise

Companies vary in size, and there are a few ways to measure them. For some people this information can be very useful: Investors – how safe is it to invest in companies Government – Tax Competitors – Compare their company with other companies Employees – Job security, how many people will work with Banks – can they get? a business back loan.

Number of employees He does not work in capital intensive companies that use machinery. Output value. It does not take into account occupied persons. It does not take into account sales revenue. Value of sales It does not take into account occupied persons. Capital employed. He does not work in labor intensive companies. High capital but low output means low efficiency. You cannot measure the size of a business by its profits, because profits depend on too many factors, not just the size of the company.

20 Business Growth All business owners want to expand their business. They get the following benefits: Higher profits More status, power and pay for managers Lower average costs (economies of scale) Higher market share

Explain The Contribution Of Tertiary Sector In India’s Gdp

Internal Growth: Organic growth. Growth paid for by owners’ capital or retained earnings. External growth: growing by acquiring or merging with another business. Types of mergers (and main advantages): Horizontal merger: merging with a business in the same business sector. It reduces the number. Economies of Scale of industry competitors Increasing market share

Certified product outlet Profits made by the retailer are absorbed by the manufacturer Preventing the retailer from selling products from other businesses. Market research on customers transferred directly to the manufacturer Backward vertical merger: continuous supply of raw materials Profits from the primary sector business are absorbed by the manufacturer. supplying other businesses Controlled cost of raw materials

There are a number of reasons why some businesses remain small. These are:  Type of industry the business is in: Industries that provide personal service or specialized products. They cannot be increased because they will lose the personal service that customers demand. For example hairdressers, cleaning, shops, etc. Market Size: If the size of the market the business sells to is too small, the business cannot expand. For example luxury cars (Lamborghini), expensive fashion clothes, etc. Owners’ Goals: Owners may want to maintain a personal touch with employees and customers. They don’t want the added stress and anxiety of running a larger business.

In order for this website to function, we record user data and share it with processors. To use this website, you must accept our Privacy Policy, including our cookie policy. The quinary sector of the economy is a service-based branch of the third sector. It generally includes health, education, culture, research, police, fire services and non-profit government industries.

Is The Tertiary Sector Playing A Significant Role In The Development Of Indian Economy?​

Other definitions may also include all types of non-profit organizations such as charities and NGOs. Some definitions also include cultural, domestic and media services (Balan, 2020).

By all common definitions of the quinary sector, any service provided by the government is part of the quinary sector of the economy. Some economists also include all gold-collar occupations in this sector.

Economic activity can be divided into five main sectors. These sectors are known as the primary sector (raw materials).

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