The Tertiary Sector: A Comprehensive Overview
The Tertiary Sector
5. Financial Services
Financial services manage money. These services are provided by banks, savings banks, brokers, investment companies, stock markets, and insurance companies.
6. Transportation Services
Transportation services provide transport and intermediary means for these services. Developed countries have good infrastructure, making transport safer, more convenient, and faster. In contrast, developing countries often have insufficient and outdated transportation systems.
Types of Transportation
- Terrestrial Transportation: This encompasses both road and rail transport.
- Road transport: The most common way for people to travel, especially short distances, and essential for transporting goods.
- Rail transport: Intended for transporting large volumes and weights of people and goods.
- Naval Transportation: Includes maritime and river transport. Today, over 90% of global trade in goods is transported this way.
- Air Transportation: Designed for transferring passengers and freight.
Global Transportation Networks
Land transport networks show significant contrasts between wealthy and poor countries. Developed countries have well-maintained road networks and railways. Three main routes dominate global land transport:
- North Atlantic
- Indian and Mediterranean
- Pacific
7. Tourism
Tourism is any movement to a place outside one’s usual environment for at least 24 hours. There are many different types of tourism, including sun and sand, adventure, mountain, rural, cultural, religious, health, wellness, gastronomy, and shopping.
Until the mid-20th century, tourism was a privilege only the wealthy could afford. However, from the 1950s onwards, this activity experienced a boom due to several factors:
- Increased income allowing more people to travel.
- Paid holidays and retirement pensions.
- Increased leisure time.
- Widespread car ownership and improved road networks.
- Affordable air travel.
- Simplified or eliminated border formalities.
- Interest in exploring new places.
Main Tourist Destinations
The regions receiving the most tourists are Mediterranean countries, Western and Northern European countries, and East Asia.
8. Information and Communication Services
Media
A message is any information that clarifies and expands our knowledge. There are two types of communication:
- Interpersonal communication: Between a small number of people.
- Social communication: Intended to reach thousands or millions of people.
Different services are used for each type of information: email and telephony are the main means of interpersonal communication, while press, radio, film, and television are the major social communication media.
The Computer Industry: The Age of the Internet
The mid-20th century marked the beginning of the “Information Revolution.” The development of Information and Communication Technologies (ICT) has enabled rapid and continuous growth in our ability to access and process information. The greatest example of this communication revolution is the internet (a computer network allowing computers to connect directly and share information).
Classifying Services
Services can be classified based on two criteria: who pays and their purpose.
Who Pays?
- Public Services: Guaranteed by the state or other administrations and supported by taxes.
- Private Services: Offered by businesses for profit.
Where are Services Concentrated?
The service sector thrives in developed countries, providing around 70% of wealth and employment. These countries also control most global trade. Four factors explain the dominance of the tertiary sector in rich countries:
- High incomes and government commitment to providing basic social services (welfare services).
- Mechanization and high agricultural and industrial productivity requiring fewer workers.
- The tertiarization of industries.
In underdeveloped countries, services are scarce and of poor quality, accessible only to a portion of the population, concentrated in urban and tourist areas.
The Offshoring of Services
Some services don’t require the provider to be near the users. Consequently, many services are now delocalized and provided from distant locations.
9. Trade
Trade encompasses activities intended for the exchange of goods and services. It depends on three factors:
- Development of transportation and infrastructure.
- Market size (the number of consumers able to buy a product or service).
- Population wealth (consumer purchasing power).
Types of Trade
- Domestic Trade: Commercial activities within a country’s borders.
- International Trade: Trade between countries. This involves imports (purchases of goods and services from other countries) and exports (sales of goods and services to other countries).
The difference between imports and exports defines the commercial balance and balance of payments.
- Commercial Balance: The difference between exports and imports. It’s positive when exports exceed imports and negative when imports exceed exports.
- Balance of Payments: Positive when income generated is greater than expenses and negative when expenses exceed income.
Major Trade Flows
International trade is increasingly intense and dominated by three regions: the EU, North America, and Southeast Asia. Developed countries in these regions control much of world trade.
Trade Organization
World trade is regulated by agreements. The World Trade Organization’s mission is to facilitate international trade by eliminating trade barriers.
Trade Blocs
- Free Trade Area: Member countries agree to eliminate tariffs and allow free movement of goods within the zone (e.g., North American Free Trade Agreement).
- Customs Union: In addition to eliminating tariffs, member states establish a common customs policy for products from other countries (e.g., Southern African Customs Union).