Tertiary sector of industry

From ArticleWorld

Tertiary sector industries are often also called service industries. This sector includes non-physical products and services such as customer care, banking and investing, news media, foodservice, teaching, public utility provision, management consulting, entertainment, and tourism. The tertiary sector is often involved in distribution logistics and retailing, and industries in this sector do not effect any major changes in physical goods before reselling them to the customer.

Challenges of a tertiary sector economy

The main challenge facing tertiary sector industries and service providers is the difficulty in determining the actual value of their work. Since there are no physical products or chains of production, value becomes a fraught question, especially because there are few guarantees in a number of these fields. For the consumer the difficulty lies in differentiating between the various competitors and choosing between them. Consumer decisions are often affected by branding, rather than any actual difference in quality or level of service.

Why move towards a service economy

The size of tertiary sector industries is often seen as an indicator of economic and social development. The reasons for growth are more complex, though. One major catalyst is the fact that manufacturing, reliant as much on raw materials and optimally priced labor as on start-up capital and infrastructure, faces competition from international sources. Thus, as manufacturing becomes comparatively more expensive in tertiary sector economies, the service sector, which these countries are more skilled at anyway, becomes proportionately more lucrative.

Manufacturing and service

Industrialized countries, in general, see most growth in the tertiary sector. So much so that the principles of the service industry are gradually making their way into management practices in multi-sector businesses, leading them to conclude that production, packaging and sales efforts are not enough to maintain competitiveness in the long run and that consumers need to be hooked into purchases of physical products with the promise of value-added services. This is visible in the electronic and computer equipment industries.