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Service sector

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The service sector, also called the tertiary sector, is put into three main areas so it can be better understood. The other two are the primary sector, which covers areas such as farming, mining and fishing; and the secondary sector which covers manufacturing and making things. The service sector provides a service, not an actual product that could be held in your hand. Activities in the service sector include retail, banks, hotels, real estate, education, health, social work, computer services, recreation, media, communications, electricity, gas and water supply.[1]

The service sector is an important part of the economy. For example, in Australia in 2007, 85% of all businesses were in the service sector.[1] In 2009 there were more than nine million people employed in the service sector in Australia, which was 86% of all jobs.[1] In India, there has been a huge growth in service sector businesses which made up 55% of India's GDP in 2006—2007.[2] Computer software businesses in India are increasing at a rate of 35% per year.[2]

Increasingly service sector businesses need to focus on what is now being called the “knowledge economy”.[3] They need to keep ahead of other businesses by understanding what it is their customers want and be in a position to give it to them quickly and at low cost. One good example of this are banks which have gone through enormous changes in recent years. Using information and communication technology, banks have vastly reduced the number of people they need to employ, and lowered the cost of providing bank service. For example, an automated teller machine is able to provide basic banking services 24 hours a day, 7 days a week, in many different places. Before this, banking services were only available from the bank when it was open. Many banks and building societies have joined together to form much lower cost businesses that can make more money from a wider customer base. The key to this process is gaining information about their customers and constantly coming up with new services for them. An example of a company trying to come up with a new service for customers is iCard, which is looking at ways to link mobile phones to computers and social networking.


  1. 1.0 1.1 1.2 "Services Sector Fact Sheet" (in English). Australian Government. Retrieved 2010-03-20.
  2. 2.0 2.1 "Service sector of the Indian economy" (in English). Business Maps of India. Retrieved 2010-03-20.
  3. "Knowledge Economy" (in English). Australian Centre for Innovation. 2008. Retrieved 2010-03-20.