Tertiary Sector and Economic Growth
Tertiary Sector: Services and Economic Growth
Introduction
The tertiary sector encompasses activities that don’t directly produce goods but support other economic sectors. These include transportation, commerce, and public services like healthcare and education.
Growth of the Tertiary Sector
Following the Industrial Revolution and the development of transport throughout the 20th century, the tertiary sector experienced significant growth. This expansion is attributed to several factors:
- Increased female labor participation
- Development of services essential for other sectors’ growth
- Higher citizen income and leisure time
- Improved communications
- Consistent demand for basic and leisure services, including tourism
The service sector contributes significantly to the gross domestic product (GDP) and employs a large portion of the working population, although its value contribution to production can be debated.
Transportation
Air Transport
Air transport is crucial for the service sector. Its modernization has facilitated trade expansion, reduced production costs, and fueled tourism growth. This growth is driven by:
- Expanding trade and markets
- Continuous infrastructure development
- Need for secure energy supply
- Rapid tourism growth
- Technological advancements in the automotive industry
Air transport is the fastest but has limited capacity, making it expensive. It’s primarily used for long-distance passenger travel and high-value, lightweight goods. Developed countries with the necessary infrastructure (airports, terminals, warehouses, and technical expertise) benefit most from air transport.
Water Transport
Water transport is essential for long-distance goods transportation and is the cheapest option. River transport remains vital in countries with suitable infrastructure, such as the Rhine, Danube, Volga, Mekong, Yangtze, Mississippi, Congo, and Nile river systems.
Shipping is crucial for transporting heavy goods, especially gas, oil, and cereals, across vast distances. Major maritime routes include the Atlantic, Pacific, and Indian Oceans.
Intermodality addresses the challenge of sea transport’s inability to deliver goods directly to consumers. Containers facilitate the combination of various land-based transport methods.
Ground Transportation
Ground transport, including rail and road, is the most widespread and crucial mode of transport, enabling access to remote locations. It’s essential for other transport modes to reach their final destinations.
Rail transport emerged during the first Industrial Revolution to move large quantities of goods cheaply and quickly. Initially developed in Britain, its expansion relied heavily on the steel industry. Rail transport requires significant investment and its importance varies across countries. In developed nations, it’s essential for transporting basic goods and people.
Road transport, one of the oldest forms, requires a basic road network. Developed countries have complex road systems, including highways and motorways. Its main advantage is its extensive reach.
Trade
Trade facilitates exchange between production and consumption, ensuring goods reach consumers. It has become globalized and immensely valuable due to:
- Expansion of transport and communications
- Development of global markets
- Increased population income
- Depreciation of assets
A global market creates economies of scale. Market models vary significantly, from Arab souks and African markets to major trading centers in Europe, America, and Japan.
International Trade
Developed countries dominate international trade, their products reaching globally. Underdeveloped countries often depend on economic superpowers, exporting raw materials and importing technology.
Domestic Trade
Wholesale trade involves buying from producers and selling to retailers. Retail trade sells directly to consumers.
Tourism
Tourism has grown massively since the 1960s, driven by:
- Economic growth in Europe, Japan, and the United States
- Development of the welfare state in Europe
- Improved communications
- Increased international security (despite terrorism)
Types of Tourism
: sun and beach tourism: it is characteristic of the Mediterranean and the Caribbean
Rural tourism is a recent model, we evaluate the tranquility as opposed to vertigo and speed of the big cities.
Cultural: is based on the attraction of cities of great historical value, in Europe include cities such as Rome, Paris, Prague, Madrid, Barcelona, Granada, Berlin, Amsterdam and London. NY In america. In Asia China, Japan, Thailand and India, and Africa, Egypt.
Business: good infrastructure are needed: airports, high-class hotels, good communications
Winter: it is a destination in growth, development needed ski resorts, the mountain is also a prime destination for summer
Religions: a few cities are centers of pilgrimage for many believers, Christian Rome, Mecca, for musulmanues, and Jerusalem for Christians, Jews and Muslims