Types of Services

• A service is an activity that satisfies human needs or wants in exchange for money.
• A settlement is a permanent collection of buildings where people live, work, and obtain services; settlement sizes can range from small to large, accommodating from 100 to a million people.
• Settlements occupy 1% of the Earth's surface and are home to most of the human population.
• In More Developed Countries (MDCs), services account for more than half of the Gross Domestic Product (GDP).
• In Less Developed Countries (LDCs), services account for less than half of the GDP.

Types of Services

• There are three main types of services: consumer, business, and public.

Consumer Services

• Consumer services provide services to individual consumers who can pay for them.
• 50% of all jobs in the US are in consumer services.

Subdivisions of Consumer Services

• Retail and wholesale services account for 14% of all US jobs and include shops, stores, grocers, and vehicles.
• Education services (excluding teachers) account for 15% of all US jobs.
• Health and social services account for 14% of all US jobs.
• Leisure and hospitality services account for 9% of all US jobs and include restaurants, bars, lodging (hotels, motels), arts, and entertainment.

Business Services

• Business services facilitate other business activities.
• 1/4 of all US jobs are in business services.

Subdivisions of Business Services

• Professional services account for 11% of all US jobs and encompass technical services like law, managing, engineering, and support services.
• FIRE (Financial, Insurance, Real Estate) services account for 7% of all US jobs and include banks, financial institutions, insurance companies, and real estate.
• Transportation and information services account for 7% of all US jobs and include driving trucks, warehousing, publishing, and broadcasting.

Public Services

• Public services provide security and protection for citizens and businesses.
• 1/10 of all US jobs are in public services.

Subdivisions of Public Services

• Federal government employees make up 1/6 of all public service workers.
• State government employees make up 1/4 of all public service workers.
• Local government employees makeup 5/8 of all public service workers (most of the workers).
• The service sector has experienced increased job growth in MDCs.
• The service sector was negatively impacted by the global recession that began in 2008.

Sectors in US Employment

• Primary sector: Agriculture and mining
• Secondary sector: Manufacturing and construction
• Tertiary sector: Service sector
• From 1972-2010, jobs in the primary and secondary sectors declined due to the growth of the tertiary sector.
• In business services, jobs in professional services expanded the most, but jobs in finance and transportation services declined due to improved efficiency.
• In consumer services, jobs in healthcare, social services, and leisure and entertainment services expanded the most, but retailing did not increase as much.

Services During the Recession

• The service sector boosted the economy of MDCs.
• The service sector contributed to the start of the 2008 recession due to:
  • High growth in real estate services fueled by people buying more land to gain more money
  • Financial services lending subprime mortgages (high-interest rates for people with poor credit) and inventing derivatives
  • Banks stopped handing out loans because they knew they wouldn't be paid back

Central Place Theory

• Central Place Theory was created by Walter Christaller (with August Losch and Brian Berry) in the 1930s and helps identify the most profitable location for a business
• A central place is a market center for the exchange of goods and services for people in the surrounding area, maximizing accessibility.
• Businesses compete against each other to serve as markets for goods and services, creating a regular pattern of settlement.
• A market area (hinterland) is the land surrounding the central place.
• Nodal regions are first drawn with a circle and later edited as a hexagon due to hexagon compromise.
• Hexagon compromise uses hexagons for market areas because they contain both geometric properties of circles and squares.
• People closer to the central place will get service from local establishments.
• People closer to the periphery (boundary) will choose establishments outside of the market area.
• Daily Urban Systems: 48 states are divided into functional ties that make sure every settlement has access to the same services.

Factors Determining Market Area

• Range: the maximum distance people are willing to travel to utilize a service, measured in terms of time.
• Threshold: the minimum number of customers required to support the service.
• Consumers inside the range depend on products due to trends
• Many MDCs have many small settlements and fewer large settlements.
• Market areas should ideally be series of hexagons with different sizes, but environmental barriers can disrupt this perfect arrangement.
• The nesting pattern of settlements is shown by overlapping hexagons of four different levels: hamlet, village, town, and city.
• In many MDCs, ranking settlements from largest to smallest produces regular patterns, called rank-size distribution, that is divided into two parts

Rank-Size Rule

• The country's nth largest settlement is 1/n the population of the largest settlement.

Primate City Rule

• The largest settlement has more than twice as many people as the second-ranking settlement.
• A primate city is the country's largest city (e.g., Mexico City and Guadalajara).
• A rank size distribution indicates a wealthy society that can justify the supply of goods and services.
• The absence of rank-size distribution in LDCs suggests a society too poor to pay for a variety of services, requiring people to travel long distances.

Central Place Theory

• Central place theory is used to determine where the profitable location it is to open a market area.
• Market area analysis is used to determine where to close facilities.
• Central place theory describes the distribution of services based on settlements serving as market centers (central places).
• Market area analysis is a process that determines the best location for a service based on potential customers and competitors (market area).
• The gravity model predicts that the optimal location of a service is directly related to the number of people in the area and inversely related to the distance people must travel to access it (Range and population number)
• Periodic markets are collections of individual vendors who group together to provide goods and services in a location on specified days, usually in LDCs and rural MDCs.
• Agglomeration is the clustering of people, businesses, and activities in a particular area, creating a concentration that leads to increased efficiency and collaboration.
• Agglomeration results in the formation of industrial districts and urban centers, as well as job creation and urban development.
• All urban settlements provide consumer services, but not every settlement of a given size has the same number and types of business services.
• Urban settlements tend to specialize in a few specific business services.

Global Cities (World Cities)

• Global cities (world cities) are placed at the top of the urban settlement hierarchy
• Global cities are closely related to the global economic system.
• Global cities are centers of communication and financial economies.
• Business services in global cities include lawyers, accountants, and professionals that work with large corporations.
• Global cities serve as headquarters for large corporations, large banks, and insurance companies.

Global City Hierarchy

• The global city hierarchy includes categories such as Alpha++, Alpha+, Alpha, Alpha-, Beta+, Beta, Beta-, Gamma+, Gamma, Gamma-.
• New York is an alpha++ city.
• The global city hierarchy is chosen by economic, political, cultural, and infrastructure factors.
• Global cities are usually national capitals and contain national and international political power.

Business Services in LDCs

• Business services in LDCs include offshore financial services, which use offshore financial centers with tax-free or low-tax environments and bank secrecy laws.
• The Cayman Islands are a prominent example of offshore financial services.
• Most offshore financial centers are identified by the International Monetary Fund, United Nations, and Tax Justice Institute.
• Business-process outsourcing (BPO) is found in peripheral regions (outer boundaries).
• Back-office functions, such as insurance claims processing, payroll management, transcription work, and other routine clerical activities, are performed at a lower cost by workers in LDCs.
• LDCs with a large labor force proficient in English are more favorable for firms planning to outsource.
• Offshore financial services and back-office functions are supported by laws, weak regulation, and low-wage workers.

Economic Base of Settlements

• Basic industries are the foundation of a settlement's economic structure and primarily export to consumers outside the settlement.
• Non-basic industries provide consumer services to customers within the same community.
• The economic base of a country is a collection of basic industries.
• A new basic industry attracts new workers and families, leading to a pattern of new settlements and non-basic customer services.
• The economic base of a post-industrial society, such as the US, is in business, consumer, or public services.
• US settlements are distinguished by the different distributions of basic activity.
• The US is a post-industrial society where the service sector generates more wealth than manufacturing.
• Manufacturing was the original understanding of basic industries.
  • Durable manufacturing goods include steels and automobiles.
  • Nondurable manufacturing goods include food, chemicals, and paper.
• Rural settlements are centers for agriculture that provide a small number of services.
• Urban settlements are centers for consumer and business services.
• Rural settlements and urban settlements each contain 50% of the world population.
• Types of rural settlements are organized according to the local, cultural, or physical landscape.
• Clustered rural settlements, also known as hamlets or villages, include barns, agricultural facilities, consumer services, churches, schools, shops, little businesses and public services.
• Land is distributed to each person in clustered rural settlements and has full control over some land, limited to 1-2 km.

Methods of Distributing Lands (Allocation)

• Individual farmers own/rent a land.
• Land and land crops and its uses are controlled by the settlement/lord.

Types of Clustered Rural Settlements

• Circular rural settlements: central open space surrounded by structures
  • Kraal villages in sub-Saharan Africa by Maasai people
  • Gewandorf settlements in rural Germany
• Linear rural settlements: comprised of buildings clustered along a road, river, or dikes to facilitate communications
  • St. Lawrence River in Quebec
  • French long-lot system
• Dispersed rural settlements: North American landscape with farmers living on individual farms isolated from neighbors
• In the US, this type of settlement dominated the American Midwest because early settlement pioneers came from Middle Atlantic colonies.
• In the UK, most countries converted rural land from clustered to dispersed to improve agricultural production.
• Enclosure movement (1750-1850): transformed rural landscape to dispersed rural settlements with individual farms by consolidating (making it stronger) individually owned strips of land.

Impacts of Enclosure Movement

• it Lessened travel time between fields, decreased the construction of more roads, and allowed crop freedom.
• Greater agricultural efficiency resulted but destroying village life.
• Early consumer services led to permanent settlements:
  • Finding a place to bury the dead, rituals, ceremonies that were guarded by priests to say prayers and temples were created
  • Find a place to house males to travel farther for food, and females to take care of children and household objects.
  • Settlements became manufacturing centers for goods, tools, and shelter, leading to specialization

Early Public Services

• They lead to permanent settlements.
• Followed religious activities
• Followed protections such as walls and gunpowder
• Early business services also triggered permanent settlements
• Because not everyone had equal access to food, people store food and exchanged
• Settlements became warehousing to store extra food.
• To facilitate trades, leaders created a currency system and producer services.
• Prehistoric urban settlements in the Fertile Crescent of SW Asia and North Africa:
• Ur is the oldest urban settlement in Mesopotamia (Iraq).

Ancient Urban Settlements

• Organized into city-states: independent self-governing communities that included settlement and nearby land
• Oldest settlements included Knossos (Crete island), Troy (Turkey), and Mycenae (Greece), in the eastern Mediterranean around 2500 BC.
• Athens were the largest city-state in Greece.
• Rome grew to a population of 250,000 to 1 million

Urbanization

• It is the process by which the population of urban settlements grows
  • Increase in population in urban settlements
  • Increase in percentage of population in urban settlements
• MDCs have a higher percentage of urban residents than LDCs.