Tertiary Sector: Services, Importance & Economic Impact
Tertiary Sector
Brings together education, health, safety, leisure, and transport.
Tertiary Today
Due to socio-economic changes in recent years, there has been an increase in service needs. This trend dominates the service sector and is unevenly distributed by:
- Level of development of countries
- Spatial distribution and density of the population
- Degree of wealth of the population
Classification of Activities
Services to People
Activities that satisfy people’s needs and attend to basic needs such as education, health, justice, tourism, and hospitality. These are usually guaranteed by the state and are public. In contrast, consumer service companies are private.
Services to Companies
Activities that support the development of agricultural and industrial enterprises.
Distribution Services
Communication and transportation services that allow goods and people to move around and reach the entire planet.
Social Services
Designed to meet the basic needs of people, known as the welfare state, through taxes on citizens to finance public services.
Education
Provides personal autonomy, social integration, vocational training, and contributes to scientific and technical progress and increasing a country’s culture. The priorities are to:
- Establish compulsory education
- Fund gratuity service
- Promote equality of opportunity
State Intervention Governs:
- Educational levels
- Subjects
- Courses and stages
It also stimulates VET, higher education, program support, and scholarships.
Quality Indicators:
- Enrollment
- Student-faculty ratio
Health
A basic necessity that involves ensuring the right to life of the population and a decent life. Its objectives are to:
- Establish a health system
- Prolong life years
- Reduce inequalities in the prevention and treatment of diseases
All materialized in a huge investment, technically gifted centers, and a health staff dedicated to primary care, specialist care, and drug subsidies.
Services Companies
Includes services administration or business management and banking.
Business Administration
Covers economic activities, human resources, accounting, taxation, insurance, advertising, legal, and IT. Its economic significance is high because it creates jobs and skilled workers, leading to precise management. This has led to the outsourcing of some services.
Financing Activities
Involved in channeling capital movements and are of several types: banks, savings banks, and agencies. Their services include loans, savings management, implementation of receipts and payments, and currency exchanges, all in return for interest or commissions.
Tourism
A recreational activity involving the temporary movement of people outside their usual residence for more than a day. Tourism serves basic needs and has enormous economic importance:
- Creates jobs
- Encourages the development of other activities
- Encourages the building of infrastructure and equipment
Types of Tourism:
- Cultural
- Coastal
- Mountain
- Exotic landscapes
Tourism Trends:
- Increasing the quality of the tourist offer
- Greater diversity of supply
- Diversification of destinations
However, there are also challenges such as imbalances in natural ecosystems, air, water and soil pollution, precarious working conditions in tourism activities, and price increases for products and services.
Trade
A set of activities and transactions of goods and services in exchange for other services or money.
Types:
- Interior: Takes place within the borders of the state
- International: Takes place between different states
Economic Importance:
- Creates wealth
- Creates jobs
Types of Interior Trade:
- Wholesale: Large companies that buy large quantities of merchandise. The price rises as the number of distributors increases.
- Retail: Shops, food, hypermarkets
Trends:
- Constantly adapting to consumer habits
- Changing product displays
- Incorporating technical advances
- Enhancing sales strategies
- Innovation of retail spaces
International Trade
Consists of the exchange of goods and services between states.
Exports:
Goods and services a country sells to others.
Imports:
Products and services that a country buys from others.
Trade Balance:
The difference between the value of a country’s sales and its purchases.
Balance of Payments:
If revenues are higher than payments, the GNP is in surplus; if lower, it is in deficit.
The Role of the State:
Ranges from non-intervention to protectionist measures such as:
- Tariffs: Taxes to be paid by importers
- Maximum quotas: Import restrictions on certain foreign goods
- Grants: To promote sales abroad
Trading Blocs:
In the face of constant economic globalization, major economic blocs encourage trade between their members. Some examples include:
- EU
- NAFTA
- ASEAN
- Mercosur