Overview of the Service Sector

Service Sector Overview

• Global service sector output: $61 trillion annually, equivalent to $116 million per minute.
• Definition: Characterized by "non-material" activities (e.g., transportation, haircuts, restaurant visits). Often referred to as "intangible goods."
• Dominance: Largest sector globally, exceeding the combined industrial and manufacturing sectors by a significant margin (63.6% of global economy).
• Leading Nation: The US has the largest service sector, accounting for 30% of global output, surpassing the next four largest economies (China, Japan, Germany, and the UK) combined.

Key Characteristics of Services

• Intangibility: Services cannot be physically possessed or transferred.
• Inseparability: Service production and consumption happen simultaneously.
• Inventory: Services cannot be stored.
• Inconsistency: Each service instance is unique.
• Involvement: Both provider and consumer are actively involved.

Environmental Impacts of Services

• Services can have significant social and environmental consequences, despite not involving physical products.
• Examples: Tourism negatively impacting natural resources, transportation contributing to greenhouse gas emissions.
• Cruise ships as a prominent example of a polluting service.
• Weekly environmental impact of a large cruise ship:
  • 200,000 gallons human sewage
  • 1 million gallons greywater (sink, bath, shower, laundry, galley)
  • Waste incineration at sea, emitting hazardous waste and toxic substances (fumes, heavy metals).
• Significant air pollution from cruise ships; one ship can create smog pollution equivalent to 350,000 cars. High sulfur content in bunker fuel contributes to smog levels.
• Other environmental concerns from cruise ships:
  • Significant energy usage equivalent to 80,000 households
  • Daily discharge of 15 gallons toxic chemical waste (dumped untreated)
  • Daily CO2 emissions equivalent to six Hummer cars annually
  • Large amounts of petroleum spills

Quaternary and Quinary Sectors

• Evolution of service sector: Traditional service sectors (e.g., transportation, hospitality) are augmented by specialized knowledge sectors.
• Quaternary Sector: Knowledge-based economy. Includes information technology, consulting, research & development, education, finance, design, culture, media, and entertainment.
• Quinary Sector: Very limited data; top-level decision-making roles (e.g., CEOs, top government officials).
• Large Contribution to Economies: The quaternary and quinary sectors combine to compose a large portion of economies in developed countries, estimated to be 59% of Australia's economy in 2015.
• Reliance on Knowledge: Quaternary sector activities heavily rely on advanced education, specialized skills, and intelligence. The sector encompasses programmers, designers, consultants, entrepreneurs, scientists, lawyers and researchers.