Question.
Discuss the significance and growth of the service sector in modern economic development.
(Class 12 geography, Fundamentals of Human Geography, Chapter 7. Tertiary and Quaternary Activities )
Answer.
The service sectors include all activities in the tertiary, quaternary, and quinary sectors that are based on highly specialized skills and knowledge.
The following services come under the service sector:
Transport services (roads, railways, air services, etc.)
Communication services (TV, radio, Internet, telecommunications, etc.)
Trade and Commerce (both retail and wholesale)
Business Processing Services (BPO) and Call Centers
Hospital, Tourism, and School Services
Other services such as consulting and outsourcing
Earlier developed countries focused on the development of the manufacturing sector but now they are focusing on the development of the service sector as the service sector is the backbone of modern economic development. Following are the significance and growth of the service sector in modern economic development:
Transportation service is the backbone of the economy of any country. Transport services work to transport raw materials to industries and it also transports the final goods made from industries to the consumers. The development of primary sectors (agriculture) and secondary sectors (industry) is possible only with the development of transport services.
Transport services not only provide the movement of goods but also people. The development of the tourism sector is dependent on the development of transport services in various regions.
Both the transport sector and tourism sector provide lakhs of jobs and are the basis of the livelihood of lakhs of people.
Communication services like TV, radio, internet, and telecommunications are creating millions of jobs every year and making other economic sectors like primary and secondary sectors more efficient.
Research and development is part of the services sector, it provides innovation and technology for economic development.
Developed countries have outsourced outsourcing businesses like software development, call centers, etc. to developed countries, which has led to the growth of the economy of countries like India.
The service sector is not as much dependent on the availability of natural resources such as minerals, and fertile land as the primary sectors. Hence it helps in the development of areas that are not rich in natural resources.
India has huge human resources and has great potential to provide services (such as hospitals, IT, teaching, and consultancy) to the whole world, thus the service sector is vital for India's modern economic development.
The economy of most developed countries is dependent on the development of the service sectors.
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