Reasons for the growth of the Services Sector has experienced evolution unprecedented in the history of the economy. This sector of the economy is an important source of employment generation and represents a large part of the Gross Domestic Product (GDP) of developed countries. It covers activities such as communications, transport, commerce, tourism, culture, health, education, etc.
You can easily assume that the service sector proves to be the main pillar of every modern economy and its growth automatically means leveling up all other sides of industry. Today we will give you a clearer insight into reasons for its development and how it can affect even your business in the long run.
The Tertiary Sector Is the Engine of All Development
Services jobs accounted for more than 80 percent of world-wide private-sector employment or 89.7 million jobs in the USA for the last year. That said, you can take as an example the UK based Christmas party events organizationof a successful company that moves the boundaries of the services sector just by having a prosperous business year. And how exactly do they manage to do that?
It all comes down the point where it can be seen that one company that provides services that in turn generate high profit also increase the purchasing power of other smaller businesses in its area. That might be the sole reason why investing in services sector proves to be the wisest move for future prosperity.
Other than that it is clearly visible that the success of previously mentioned company proved to others that they can start their own similar business in a private sector that will improve the quality of service for both newcomer and already established companies that provide the same service in that area.
So, what would be the reasons to do so other than the one that we already mentioned? There are more then we can possibly mention in this article but some of them step forward and distinguish as more important than others.
The Increase in the Need for Services for All Ages
Given the greater complexity of daily life, we experience the increase in the concentration of the population in urban areas. Also, the increase in the number of elderly and children requires people and organizations that can give them the necessary attention.
Migration of Service Activities Towards External Service Organizations
An example can be seen in the proliferation of companies that provide services such as automatic laundries, shopping centers, festival agencies, office cleaning, etc.
Increase in Female Labor Force
This factor has been generated by companies that provide childcare services, beauty salons, fast food restaurants, dry cleaners, domestic employment agencies, etc.
Greater Purchasing Power if the Population
Once the basic needs of the population are met, such as education, housing, and health other services start to generate a higher demand. These are the services that meet the needs of recreation, fun, consumption, body aesthetics and gastronomy. For this reason, travel agencies, gyms, shopping centers, luxury restaurants, etc. also experience development.
Technological Companies Improve the Quality of Services
For example satellite communications, automated and robotic equipment, intelligent and ecological architecture, etc.
The Globalization or Internalization of Business Management
The need to have facilities in the different parts of the world both to manage companies and to search for new business. This has generated great development in the air and maritime transport companies, international communications systems, international credit cards, etc.
The growth of the Service Business due to the Emergence of Specialized Operating Units
Most companies have been systematizing the way to provide their services. They have grown distribution in different places guaranteeing excellence and accuracy in all the operation units similar to the parent company or specialized in a particular service.
Thus, for example, there are branches of the same mechanical workshop in different parts of the same city; or branches specialized in braking systems, others in air conditioning, in brass and paint, etc. The company guarantees the provision of the service in a universal and efficient manner in all branches, since it has established standardized methods and procedures that are rigorously followed by all employees.
In a modern economy, the share of primary sector towards national income is gradually reducing, whereas; the shares of secondary and services sectors are improving day by day.
In 1950-51, the contribution of the service sector in national income was 34%, which rose up to 48.5% in 2000-01. The future holds the answers about the fate of this engine of all modern economies and helping its development will surely affect every life that is under its sphere of influence.
The service sector is an important component of any country‟s economy. It makes a direct and significant contribution to GDP and job creation while providing crucial inputs for the rest of the economy, thus having a significant effect on the overall investment climate, which is an essential determinant of growth and development. Some service sectors such as the health, education, water, and sanitation sectors, are also directly relevant to achieving social development objectives.
At this moment it’s easy to conclude that investing in the service sector of your economy will prove to be the safest way to ensure your future profits and those from the same sphere of work