The Tertiary Sector in Spain: A Comprehensive Overview
1. Spain: A Country of Services
Spain is experiencing extraordinary growth in the tertiary sector. Due to several factors, tertiary activities have become the mainstay of the economy. Limited energy resources, the need to create competitive companies within the European framework, and our dependence on tourism have accelerated this shift.
2. Characteristics of the Tertiary Sector
The tertiary sector encompasses all economic activities that do not directly produce material goods but provide services. This sector is highly heterogeneous, covering a wide range of activities. In Spain, it remains largely dominated by small and medium enterprises, although the emergence of large multinational companies is changing the industry structure.
Classifying Service Activities
- Production Services: Intermediate activities that facilitate the proper functioning of other businesses.
- Consumption Services: Services that meet the diverse demands of the population.
- Distribution Services: Services that ensure goods reach consumers.
- Social/Collective Services: Welfare services typically provided by central, regional, or local governments to address basic needs.
Geographical Distribution
Service activity is concentrated in four communities: Madrid, Catalonia, Andalusia, and Valencia, accounting for over 60% of business volume. Key provinces include Madrid, Barcelona, Valencia, Seville, and Bilbao. The Balearic and Canary Islands also benefit significantly from tourism-related services.
The Tertiary Sector in the EU
The tertiary sector has experienced exceptional growth in Europe. Globalization and the internationalization of the economy have boosted trade and finance, resulting in sector growth. The single market has further fueled service activities, with employment in the sector exceeding 70% in several countries.
3. The Tertiary Sector and Economic Development
The size of the service sector is directly related to a country’s economic development. Many consider highly developed areas as “post-industrial societies,” a model that reflects the Spanish economy.
Factors Contributing to Spain’s Economic Shift
- Improved living standards have increased per capita consumption, driving the development of leisure-related services.
- Spanish companies are increasingly reliant on business services (financial studies, market analysis, etc.), which have grown significantly.
- Mechanization in primary and secondary sectors has created a labor surplus absorbed by the tertiary sector.
- Urbanization concentrates tertiary activities in cities.
- Tourism creates jobs and promotes related service activities.
- Administrative decentralization following EU accession has increased public administration employment.
4. Trade
Trade plays a crucial role in distributing production to meet consumer demand.
Internal Trade
Spain’s trade structure has undergone dramatic transformations. Previously dominated by small shops (minifundismo), the last 30 years have seen a rise in supermarkets, a shift that occurred later in Spain than in other European countries. The food sector remains dominant.
Types of Internal Trade
- Wholesale: Trades large quantities of goods and distributes them to retailers.
- Traditional Retail: Small establishments struggling to compete with supermarkets.
- Specialized Retail: Focuses on niche markets, less affected by competition from large retailers.
- Hypermarkets: Large stores located outside city centers, often multinational companies.
- Department Stores: Located in city centers, offering high-quality products.
- Traditional Markets: Primarily focused on agricultural products.
Trade distribution depends on accessibility, population concentration, urbanization, and purchasing power, with Madrid, Catalonia, and Valencia leading.
New Forms of Commerce
New technologies are driving a second revolution in trade. Credit cards and the internet are transforming the sector, offering benefits for both buyers and distributors.
Advantages
- Convenience: Purchasing from anywhere, with home delivery.
- Global Market Access: Location is less important.
- Price and Product Comparison.
- Increased Product Availability.
- Direct Contact with Manufacturers.
- Faster Service.
- Extensive Product Information.
Companies benefit by eliminating intermediaries and interacting directly with customers. Growth is limited only by user concerns about fraud and data privacy.
Foreign Trade
Foreign trade has grown impressively due to several factors:
- Economic growth in Spain and other developed countries.
- Industrial development requiring increased imports of technology and equipment.
- EU membership and participation in the single market.
- International agreements like GATT and WTO.
Demand for consumer goods and industrial equipment has increased imports, particularly cars, machinery, and electronics, while the relative importance of agricultural exports has decreased. The trade deficit is offset by benefits in the balance of payments, especially tourism revenue. 70% of Spanish exports go to EU countries.