Services sector (services industry)

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.


The service sector or service industry is those sector or industry that is excluded from primary sector and secondary sector. This sector deals in ‘intangible goods’

Services industry or sector involves distribution, transport and sale of goods from producer to consumer. The service sector also includes the supply of a service like entertainment and cleaning services. Principal characteristic of a service industry is people to people interaction. Goods, however, may also be transformed when providing a service. For example, a restaurant cooks the food before serving it to customers.

Economic progression

Country economies tend to progress from agriculture to industry to services. The service industry is seen to be more opaque to international competition compared to manufacturing. Nations which undergoes faster economic development have greater labor costs than those countries lagging behind in the economic development road. This resultant shrinking of manufacturing in more developed economies force those nations to adopt services as a leading employment source.

Types

Service industry or service sector includes portions of a country’s economy like tourism, banking, social services, social services and education. Persons working in the service sector collaborate to do work effectively. Knowledge is utilized to increase workplace performance and also for corporate sustenance. End product of service industry is advice (consultancy services), experiences (movies), attention (hospitality industry like hotels and restaurants), and discussion (interactive TV or radio programs). Examples of service sector are:

  • News media
  • Business services
  • Consulting
  • Health care like hospitals
  • Real estate valuation
  • Personal services
  • Franchising services
  • Legal practice like lawyers
  • Disposal of waste

Problems

Businesses who act as service providers encounter problems unique to the service sector. Services are intangible and cannot be judged by potential customers before the contract is completed. For example, efficiency of a mutual fund may only be judged after considerable investment of money and time. No guarantees are given for a specific outcome. Branded firms charge more for the same service.

Small Business  |  Small Business Insurance  |  Successful Small Business  |  Small Business Tax

Related Links
Furniture Industry |  Paper Industry |  Pharmaceutical Industry |  Salt Industry |  IT Industry |  Banking Industry |  Fertilizer Industry |  Food Processing Industry |  Jute Industry |  Automobile Industry |  Gems and Jewellery Industry |  Software Industry |  Textile Industry |  Steel Industry |  Cement Industry |  Coal Industry |  Sugar Industry

About EconomyWatch PRO INVESTOR

The core Content Team our economy, industry, investing and personal finance reference articles.