Service Sector
Candlefocus EditorThe service sector is also often referred to as the tertiary sector, as it is the third sector of the economy after manufacturing and primary production. It consists of industries that provide services to businesses and individuals, such as financial organizations, health care, telecommunications, education, transportation, leisure and hospitality. The service sector is becoming increasingly important in many parts of the world, as the demand for services escalates with population growth and economic development.
Given its key role in the economy, the service sector has seen significant growth in terms of both employment and value-added in recent decades. In the United States, the service sector accounts for more than two-thirds of GDP and provides employment to more than three-quarters of the labor force. Globally, the service sector is expected to account for more than 60 percent of global GDP in 2020.
The service sector is an important contributor to economic growth, innovation and productivity. The sector acts as an incubator for new ideas and technologies, enables greater organizational efficiencies, serves a variety of customer needs and drives economic growth. Automation and technology have been key contributors to the sector’s growth and development, allowing companies to reduce manual labor, streamline operations and increase productivity.
The service sector covers a wide range of industries and activities, from transportation, hospitality, retail to technology-enabled platforms, such as streaming services and online marketplaces. The sector will continue to grow as economies continue to expand and the need for services continues to grow around the world. It is vital for governments and businesses to recognize the importance of the service sector and support initiatives that help build a competitive and resilient sector.