The role of the service industry in the modern Economy

Structure
The reasons of the tertiary sector of economy development.
The nature of service. Services and goods
The classifications of needs.

What does SERVICE mean
in English? (Longman Oxford Dictionary)
the official system for providing something, especially something that everyone in a country needs to have, or the official organization that provides it:
the health service
the postal service
the police service
a particular type of help or work that is provided by a business to customers, but not one that involves producing goods:
A wide range of financial services are avaliable
The help that people who work in a shop, restaurant, bar give you:
The service was terrible and so was the food.
Customer service

Sectors in economy
The primary sector: farming, forestry and fishing.
The secondary sector: gas, mining and manufacturing, electricity, water, construction.
The tertiary sector: service sector

Increasing role of service

What does the service industry include?
Entertainment
Hospitality Industry
Mass Media
Health Care
Waste disposal
Financial services
Consulting
Retail sales
Education

Economy today: service economy
The increased importance of service sector in industrialized economies;
Servitization of products: products today have a higher service component than in previous decades;

For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialised countries.
The economy today is called postindustrial economy. That means that the economy depends less on the industry.

The place of service industry in the economy

What is the nature of service?

What is service?
“Most authorities consider the services sector to include all economic activities whose output is not a physical product or construction, is generally consumed at the time it’s produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser”.
James Brian Jordan

What is service?
Tangible – intangible
The period between the demand by a customer and the supply is very short, sometimes immediate/ the period between the demand by a customer and the supply can take many months

Can/ cannot be touched, handled, smelled, tasted;
Standardized and prepared not for individual demand/ Meets need of customer after face-to-face conversation
Can be stored for futher consumption/ can‘t be stored;
Unique/ not unique
Rely on very subjective experience.
Possible to standardize/ difficult to standardize

Maslow’s theory