Tertiary sector

1.What is the tertiary sector?

Unlike the primary or secondary sectors, the tertiary or service sector does not produce material goods. It provides services to people and other economic sectors instead.
2. Explain the growth of the services sector

This sector includes a large number of activities associated with areas such as healthcare, education, tourism, retail, transport and logistics, communications, culture, leisure, sport, etc.

In developed countries, the tertiary sector has undergone such significant growth, in terms of both number of employed people and wealth generated, that it is now the most important sector.

The number of people employed in this sector has also increased in less developed countries.

The growth of the tertiary sector coincided with the emergence of the information society.

This has caused so many changes (technical and scientific developments, the globalisation of the economy and increased trade) that many people talk about a tertiary revolution.

3. What is the quaternary sector

This sector provides the knowledge that enables other sectors of the economy to grow. It is associated with high intellectual content, as in the case of research.

We are currently witnessing a major change in the global economy, which is no doubt related to the expansion experienced by this sector.

4. Explain services today

Services have not replaced industry. There is, in fact, a great deal of interrelation and dependency between the two. To remain competitive, industry needs many diverse services, such as transport, storage, design, marketing, logistics, etc.

Consequently, when we refer to a tertiary society, or one in which services predominate, this does not mean industry has disappeared and been replaced by services. It means that services have taken on a prime and critical role in economic and social development.

Services have also proliferated in response to recent social changes.

• Greater life expectancy has made a series of services associated with caring for elderly or dependent persons essential. These include care homes, day centres, health workers, physiotherapists, etc.

• Female participation in the labour force prompted an urgent need to create nursery schools and services that simplify domestic duties, such as ready-made food, dry cleaning, etc.

• Reduced working hours and paid holidays account for the wide range of leisure activities and the importance of tourism.

Tertiary sector activities

1.What are the main characteristics of the tertiary sector?

being very diverse, not only in terms of the number of services or worker qualifications, but also in terms of the size of the companies which provide them (large companies, such as airlines, or small companies, such as beauty parlours, or even individuals, such as a self-employed electrician).

• being intangible and immaterial because services are valued according to the personal dedication put in to them.

• being activities that cannot be stored. The services are provided when needed. Supply and demand are coordinated thanks to new information and communication technologies. Many services cannot be carried out by machines or be standardised.

• being close to consumers, as direct contact between the supply and demand is often essential.

• having a relatively low degree of mechanisation, though computers are often essential.

• being unevenly distributed because, in some countries, these activities employ upwards of 70% of the labour force, while in others, it is less than 30%. There is also marked inequality between high-end and low-end tertiary services.
  2.How can tertiary activities be classified?

• Social services: These activities are associated with public administration, education, healthcare, etc. Many social services are public because they are created, organised and funded through taxes for the population’s benefit.

• These services are usually decentralised to ensure they are available to all users. There are also private social services.

• Distribution services: These activities are related to the circulation of people, goods and information and include transport, telecommunications and wholesale trade.

• Business services: Most companies outsource services to other specialised tertiary companies. These activities include advertising, research, banking and finance, insurance, legal and fiscal advice, etc.

• Consumer services: These services are associated with retail trade, hospitality (bars and restaurants), leisure (travel and tourism), repairs and installations and individual services (domestic help, hairdressing, language learning, etc.).

• Transport systems

1. Why are roads the most common way to mover people and goods?

due to the mobility and range of the vehicles that use them (cars, motorcycles and lorries).
2. What are the pros and cons of rail transport, Air transport and maritime transport?

The role of transport and transport networks

1. What is transport?

Transport is an economic activity through which people and goods are moved from one place to another.
2. What are the three main fuctions of transport?

moving people on a daily basis. The growing distance between homes and places of work or leisure, however, causes traffic congestion.

• making long-distance travel possible. As a result, tourism is now a global phenomenon and people have greater mobility.

• distributing goods and services. Easier access and effective mobility also encourage the concentration of economic activities.
  
  

• 4. What are the advantages of public transport?

It pollutes less than private vehicles.

• It greatly reduces traffic jams caused by the mass use of private vehicles.

• It reduces the noise pollution generated by private vehicles on city streets.

• It is cheaper than using private vehicles and saves time, as users do not have to look for parking.

Trade

1. What is trade?

Trade is part of the tertiary, or service, sector. It makes a vital contribution to the economies of developed countries by increasing their GDP (gross domestic product) and providing jobs.
2. Explain the elements of trade.

sellers. Individuals or companies that have goods or services they want to sell.

• buyers. Individuals or companies that want to buy goods or services.

• goods. Products that are bought and sold for money.

• markets. These are places where commercial transactions take place. There are two basic types of markets: physical markets, where material goods are traded, such as a farmers’ market, and non-physical markets, where abstract or virtual goods are traded, such as a stock exchange.
  3. What are the mean features of trade today.

Large quantities of goods are in constant movement between different regions.

• There is a worldwide network of trading partners. Domestic trade inside a country can be very active, but it is also important to create trade links with other countries.

• Along with transportation, it provides jobs for many people.

It is dominated by an ever smaller number of large companies. Big companies that export and import goods are usually large international producers with links to financial institutions.
4. What factors influence the amount of trade that takes place?

An efficient infrastructure and a transport network that gets goods to consumers in the shortest time possible and in the best possible condition.

• The population’s purchasing power and consumer confidence are also important factors. People with well-paid jobs can spend more money than those who are poorly paid or unemployed.

Positive financial results generate consumer confidence and stimulate the economy.

• Business confidence is another important aspect. The potential to make profits stimulates companies to innovate, invest and increase production.

• A large market with many potential consumers increases business confidence. Electronic commerce (e-commerce) online helps companies to buy and sell materials and products anywhere in the world.

• Prices, taxes, advertising and discounts also influence sales, especially with products that satisfy a customer’s wants instead of needs.

Domestic trade

1. What is domestic trade?

Domestic trade is the commerce that happens inside a country’s borders.

It is important because consumers can buy the products they need and because it creates wealth and jobs. Throughout the world, more than 10% of the workforce is employed in this sector.

In general, there are two types of domestic trade: wholesale and retail.

3. Explain wholesalers and retailers.

Wholesalers

These large distribution companies buy enormous quantities of goods from producers and sell them to shops.

Wholesalers act as intermediaries between producers and consumers.

Retailers

Retailers buy small numbers of goods from wholesalers and sell them to the public. This type of trade happens in different places.

• Traditional retailers often have small family shops, such as a local grocery shop or small supermarket.

• Department stores offer consumers a huge range of products. They are usually located in city centres and have many floors.

• Large shopping centres are usually located on the outskirts of cities, where the land is cheaper and there is access to motorways and railways. Shops in these centres often belong to multinational chains and sell large quantities of goods at cheaper prices.

• Street markets set up stalls in the open air on a particular day each week. The stallholders sell a wide variety of products, from food and clothes to craft goods.

International trade

1. What is international trade?

International trade is the exchange of goods and services between different countries. It includes all of a country’s imports and exports.
2. What is the difference between the balance of trade and the balance of payments?

the balance of trade. This is the difference in value between the goods that the country exports and the goods it imports.

If the value of exports is higher than that of its imports, the balance is positive. If it is the other way round, the balance is negative.

The balance of trade looks at the products exchanged between countries.  The status of a country’s balance of trade depends on the difference between the value of imports and exports.

• the balance of payments. This is all of the country’s monetary transactions. It includes goods (products and materials), services (tourism, transport, etc.) and capital (investments, etc.).

  The balance of payments is in surplus when a country’s revenue is higher than its expenditure. The balance of payments is in deficit when that situation is reversed.

  The balance of payments is a summary of a country’s monetary transactions. A country can have a balance of trade in deficit and a balance of payments in surplus, if extra money has come into the country through tourism, for example.