Tertiary sector: definition, branches and interesting facts

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2018-03-17 21:46:18

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All of us are long-familiar concepts such as agriculture, industry and services. But why we see them in our article? So simplistically it looks like a three-sector model. It was developed in the years 1935-1949. The tertiary sector of the economy and includes what we mean by services. Depending on which field is dominant in productive plan, can determine the stage of development of society.

tertiary sector of the economy

Today, in addition to primary, secondary and tertiary sectors identified by Fisher, Clark and Fourastie, consider and Quaternary – a product of the modern stage, the so-called knowledge economy.

Concept

The Theory of sectors or structural change, was developed in 1930-1940-ies by Alan Fisher, Colin Clark and Jean Fourastie. Scientists have divided the economy into three sectors of activity:

  • Primary. Its main purpose is the extraction of raw materials. It includes agriculture. Primary sector – some types of industry. Among them the fishing, mining and forestry.
  • Secondary includes all the rest of industrial production and construction business.
  • Tertiary sector – services, education and tourism.

According to the theory of structural changes in the Fisher-Clark, with the development of society, there is a shift of focus from primary sector to secondary and then to tertiary. Scientists believed that this is due to the changing nature of consumer demand. With the increase of income per capita demand for agricultural products is declining, industrial production – first increases and then begins to fall, but on the services – is constantly becoming more. It is therefore not surprising that in rich countries, the dominant sector is the tertiary.

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the composition of the tertiary sector of the economy

Clark has identified three stages of development of States. The first-agricultural. With her performance grows slowly. Second – industrial. It is associated with the development of secondary sector and the attainment of peak growth. The third stage is based on the predominance of the service sector. It Fourastie the associated dream of a new flowering of education and culture, the humanization of society and overcoming poverty.

What sectors are included in tertiary sector?

It includes those activities in which people apply their knowledge in order to improve performance, efficiency, capacity and stability of the work. Industries included in the tertiary sector of the economy, not provide a finished product, and provide services. They are involved in immaterial production. The composition of the tertiary sector of the economy had previously included information processing, but now all data operations are considered separately. This is due to the emergence of the concept of the knowledge economy. It is a new stage of development of postindustrial society. Therefore, the production of information is now taken to refer to the Quaternary sector.

what industries are included in the tertiary sector of the economy

But some economists do not consider it necessary to complicate things and use a standard model of Fischer-Clark. The tertiary sector involves providing services not only to companies but also to end consumers. It may be like transportation of goods from producer to buyer, pest control or entertainment. In the process of service provision often there is a modification of the goods, as in the restaurant business. However, the main attention is still paid to the interaction with people and their service.

Complexity definitions

Sometimes it's hard to understand where ends begins secondary and tertiary sector of the economy. Sometimes the latter also include the police, the troops, the government, charitable organizations. Therefore, in international law had developed a special classification system. They allow you to determine whether the product is tangible or not. One such system is the international standard industrial classification developed by the United Nations.

The Theory of progress

Over the past hundred years, the tertiary industry has gradually become dominant in the developed world. They became post-industrial. The primary and secondary sector is completely yielded its positions. Fourastie allocated three stages of development of countries. In pre-industrial society 70% of people employed in the primary sector, 20% – secondary, 10% – in the tertiary. Then comes the second stage. Fourastie called it industrial.

industries included in the tertiary sector of the economy

At this stage in the primary sector employs about 40% of people in the secondary – 40% tertiary – 20%. It is associated with deep automation. This leads to the fact that the value of the tertiary sector of the economy is becoming more. In post-industrial society employs 70% of the economically active population, while in primary – only 10% in the secondary – 20%. Some modern scholars recognize two stages of development related to the allocation of the Quaternary and quinary sectors.

Today, the service sector in developed countries is developing most rapidly. Engaged in it often get more than industrial workers. Gradually shifted focus from agriculture and mining to manufacturing and then to services is characteristic of all economies. The first to this trend, have joined the Kingdom. The rate at which countries become post-industrial, over time only increases. The world is changing in a few years faster than before for a hundred.

Problems of the tertiary sector of the economy

Companies which engage in the provision of services often face problems which are unknown to the producers of goods. What is tertiary sector? It is primarily immaterial production. Consumers hardly understand that they will get, and what will be the cost. Many companies that provide consulting services, do not give any guarantee for the quality of their work, but require payment for it. It all depends on the skills and experience of people.

tertiary sector of economy of Russia

The salaries of the staff involved in the provision of services is a significant part of its value. And here companies of the tertiary sector is unlikely to save. Manufacturers can use new technologies, simplification, economies of scale, to reduce costs. But the company providing the services is forced to raise prices in order to improve their quality. Another problem is product differentiation. How to choose between consulting firms? At first glance they seem to provide identical services. Therefore, to inflate the price is often only the most respected firms that are-recognized brand and deserve recognition.

Examples

Easier to understand what it is, if we consider the fact, which sectors are included in tertiary sector. Among them:

  • Business.
  • Government.
  • Telecommunications.
  • Hospitality
  • Hiking.
  • Media.
  • Health.
  • Information technology.
  • Waste management.
  • Consulting.
  • Gambling.
  • Retail and wholesale sales.
  • Franchise.
  • Real estate Transactions.
  • Education.

the importance of the tertiary sector of the economy

Financial services include banking, insurance and investment management. Professional – accounting, legal and assistance in business management.

List of States by size of the services sector

The estimated size of the tertiary sector allows us to see the stage of development of society. Consider the list of countries in their contribution of service sector in gross domestic product. In the first place the United States. In 2015, the cost of services provided totaled 14,083 trillion U.S. dollars. Thus, the US is the state with the most developed tertiary sector. In second place is the European Union. In 2015, the country belonging to it, together have provided services in the amount of trillions of 13,483 USD. In third place is China. The cost of the tertiary sector in 2015 amounted to 5,202 trillion dollars. On the fourth – Japan. Contribution of service sector in GDP amounted to in 2015 3,078 trillion dollars. On the fifth – Brazil. It 2015 were provided services in the amount of 1,340 trillion.

In Russia

Tertiary sector of the Russian economy in 2015, according to the size was on the fifteenth place in the world. His contribution to the country's GDP amounted to 720 billion U.S. dollars. It employs 58.1% of the economically active population. This means that it is not yet post-industrial.

the problems of the tertiary sector of the economy

Agriculture employs 9% of the population in industry – 32.9 per cent. However, the tertiary sector responsible for the largest part of the gross internal...






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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