An overview of services market Исполнитель

An overview of services market

Recent years have seen an increased interest in the provision of services market because of globalization, improving living standards and of course scarcity of natural recourses. Before identifyingservices market it’s worth understanding market itself first.Market is an environment that allows buyers and sellers to trade or exchange goods, services, and information. These interactions define demand and supply characteristics and are therefore fundamental to economies.

The tertiary sector of the market (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately the same as manufacturing) and the primary sector (agriculture, fishing, and extraction such as mining).

The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. The basic characteristic of this sector is the production of services instead of end products. Service industry or service sector includes portions of a country's economy like tourism, banking, social services, social services and education. People working in the service sector collaborate to do work effectively. Knowledge is utilized to increase workplace performance and also for corporate sustenance. End product of service industry is advice (consultancy services), experiences (movies), attention (hospitality industry like hotels and restaurants), and discussion (interactive TV or radio programs).

The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector.However, sometimes the quaternary sector is included with the tertiary sector, as they are both service sectors.

The quaternary sector of the economy is a way to describe a knowledge-based part of the economy which typically includes services such as information generation and sharing, information technology, consultation, education, research and development, financial planning, and other knowledge-based services. The term has been used to describe media and culture and government. The term is a further delineation of the three-sector hypothesis of industry in the sense that the quaternary sector refers to a part of the third or tertiary sector along with the quinary economic sector. It has been argued that intellectual services are distinct enough to warrant a separate sector and not be considered merely as a part of the tertiary sector. This sector evolves in well developed countries and requires a highly educated workforce.

In the quaternary sector, companies invest to ensure further expansion. It is seen as a way to generate higher margins or returns on investment. Research will be directed into cutting costs, tapping into markets, producing innovative ideas, new production methods and methods of manufacture, amongst others. To many industries, such as the pharmaceutical industry, the sector is the most valuable because it creates future branded products which the company will profit from.

According to some definitions, the quaternary sector includes other pure services, such as the entertainment industry.

The quaternary sector consists of those industries providing information services, such as computing and ICT (information and communication technologies), consultancy (offering advice to businesses) and R&D (research, particular in scientific fields).

The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as mayhappen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.

For the last 30 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is calledtertiarisation. The tertiary sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector.

The term servicesmarket refers to a model wherein as much economic activity as possible is treated as a service. For example, IBM treats its business as a service business. Although it still manufactures high-end computers, it treats the physical goods as a small part of the "business solutions" industry, and has found that the price elasticity of demand for "business solutions" is much less than that for hardware. There has been a corresponding shift to a subscription pricing model. Rather than receiving a single payment for a piece of manufactured equipment, many manufacturers are now receiving a steady stream of revenue for ongoing contracts. Another example is the banking industry, which has gone through enormous changes in recent years. Using information and communication technology, banks have vastly reduced the number of staff they need. Many banks and building societies have merged to form much “leaner” businesses capable of extracting more profit from a wider customer base.

Economies tend to follow a developmental progression that takes them from a heavy reliance on agriculture and mining, toward the development of manufacturing (e.g. automobiles, textiles, shipbuilding, steel) and finally toward a more service-based structure. The first economy to follow this path in the modern world was the United Kingdom. The speed at which other economies have made the transition to service-based (or "post-industrial") economies has increased over time. Historically, manufacturing tended to be more open to international trade and competition than services. However, with dramatic cost reduction and speed and reliability improvements in the transportation of people and the communication of information, the service sector now includes some of the most intensive international competition, despite residual protectionism.

Service providers face obstacles selling services that goods-sellers rarely face. Services are not tangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them. Indeed some, such as consultants and providers of investment services, offer no guarantees of the value for price paid. Businesses who act as service providers encounter problems unique to the service sector. Services are intangible and cannot be judged by potential customers before the contract is completed. For example, efficiency of a mutual fund may only be judged after considerable investment of money and time. No guarantees are given for a specific outcome. Branded firms charge more for the same service. Since the quality of most services depends largely on the quality of the individuals providing the services, it is true that "people costs" are a high component of service costs. Whereas a manufacturer may use technology, simplification, and other techniques to lower the cost of goods sold, the service provider often faces an unrelenting pattern of increasing costs.

Differentiation is often difficult. For example, how does one choose one investment adviser over another, since they often seem to provide identical services? Charging a premium for services is usually an option only for the most established firms, who charge extra based upon brand recognition.

Below is a list of countries by service output in 2009 (Table 1.1.1).

Table 1.1.1. Top countries by service output in 2009

As abovementioned before, one of the main and everincreasing sectors of service market is information and communications technology or information and communication technology, usually called ICT, is often used as an extended synonym for information technology (IT) but is usually a more general term that stresses the role of unified communications and the integration of telecommunications (telephone lines and wireless signals), intelligent building management systems and audio-visual systems in modern information technology. ICT consists of all technical means used to handle information and aid communication, including computer and network hardware, communication middleware as well as necessary software. In other words, ICT consists of IT as well as telephony, broadcast media, all types of audio and video processing and transmission and network based control and monitoring functions. The expression was first used in 1997 in a report by Dennis Stevenson to the UK government and promoted by the new National Curriculum documents for the UK in 2000.

ICT is often used in the context of "ICT roadmap" to indicate the path that an organization will take with their ICT needs.

The term ICT is now also used to refer to the merging (convergence) of audio-visual and telephone networks with computer networks through a single cabling or link system. There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the audio-visual, building management and telephone network with the computer network system using a single unified system of cabling, signal distribution and management. This in turn has spurred the growth of organizations with the term ICT in their names to indicate their specialization in the process of merging the different network systems.

Users and consumers can spearhead more sustainable growth through informed consumption decisions based on easy access to reliable environment-related information. They also require information about how to use ICTs to improve the environment. Further research is needed to understand how ICTs and the Internet can contribute to reaching environmental policy goals by fostering renewable energy, reducing transport, optimizing energy use and reducing material use.

Most government responses to the economic crisis include measures targeting the ICT sector and promoting ICT-based innovation, diffusion and use. To boost the recovery, three-quarters of governments have increased the priority of at least one ICT policy area.

Recent policy emphasis on areas that contribute directly to short- and long-term growth – ICT jobs, broadband, R&D and venture finance, and smart ICTs for the environment – provides evidence of the key roles that ICT policy can and must play.

Longer-term ICT policy priorities are also influenced by the economic crisis, with some differences in the overall promotion of ICT innovation across the economy. The number of governments giving high priority to security of information systems and networks has increased since 2008 in response to the ubiquity of ICTs in OECD economies, high uptake rates among individuals and organizations, and the potential risks of greater reliance on information systems.

ICT policies have changed considerably in the last ten years. They are now mainstream policies underpinning growth and jobs, increasing productivity, enhancing the delivery of public and private services, and achieving broad socio-economic objectives in the areas of health care and education, climate change, energy efficiency, employment and social development. As ICT applications and services have become ubiquitous, they have become essential for ensuring sustainability throughout the economy. This makes policy evaluation more crucial than ever to ensure that policy design and implementation are efficient and effective.