Tertiary sector of industryThe tertiary sector of industry, also called the service sector or the service industry, is one of the three main industrial categories of a developed economy, the others being manufacturing and primary goods production such as mining and agriculture. The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in tourism or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. There may not even be any goods involved, as in the sex industry. However the focus is on people interacting with people and serving the customer rather than transforming physical goods. For the last 20 years there has been a substantial shift from the other two industry sectors to the Tertiary Sector in industrialised countries. The service sector consists of the "soft" parts of the economy such as insurance, tourism, banking, retail and education. Others include:
Public utilities are often considered part of the tertiary sector as they provide services to people, while creating the utility's infrastructure is often considered part of the secondary sector, even though the same business may be involved in both aspects of the operation. Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture, toward the development of industry (e.g. automobiles, textiles, shipbuilding, steel, mining) and finally toward a more service based structure. Whereas the first economy to follow this path in the modern world was the United Kingdom, the speed at which other economies have later made the transition to service-based, sometimes called post-industrial, has accelerated over time. The term service economy, in contrast, refers to a model wherein as much economic activity as possible is treated as a service. For example IBM treats its business as a service business. Although it still manufactures computers, it sees the physical goods as a small part of the "business solutions" industry. They have found that the price elasticity of demand for "business solutions" is much less elastic than for hardware. There has been a corresponding shift to a subscription pricing model. Rather than receiving a single payment for a piece of manufactured equipment,many manufacturers are now receiving a steady stream of revenue for ongoing contracts. Manufacturing tends to be more open to international trade than services. As a result, there has been a tendency for the first economies to industrialize to come under competitive attack by those seeking to industrialize later, e.g. because production, especially labour, costs are lower in those industrializing later. The resultant shrinkage of manufacturing in the leading economies might explain their growing reliance on the service sector. See also
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