1. Chap #1 Service Economy
• Definition:
“In a service economy a large proportion of the working population is
employed not in agriculture and manufacturing but in service jobs. In service
economies too a large proportion of output is provided by the service sector.”
Types of services offered by any economy:
Travel Communication Insurance Hotel
Postal Catering Recreational services etc etc.
• Historical Background of service economy:
Till second world war most of the developed economies
(Like UK,USA,Australia,Germany) were considered as the service oriented
economies.
 Fuchs Wrote in 1968: The United States has become the world’s first
Service Economy during the period followed by World War II, first nation in
which half of the population is involved in intangible services other than food
automobiles ,houses ,cloth etc
 Smith narrated in 1972:To measure and interpret service output we
should identify weaknesses in the statistical treatment of services.
 Heilbroner: The growth of services increases the possibility of Govt
interference in the market mechanism towards a planned economic system
on order to maintain essential services.
 Gersuny &Rosengren:Sociologists are against the process of
maintaing and developing services economy as it might disturbs
marketors to discourage investments.
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2. Factors Influencing Service Economy (Specifically UK)
1) Services And Employment
2) Services And Output
3) Services And Consumption
4) Services And balance of payments
Services And Employment :
Economic Activities are divided into three classes:
1. Primary: (Agriculture, forestry fishing)
2. Secondary: (Manufacturing & Construction Industries)
3. Tertiary: (Services & Distributive Trades)
An international Comparison:
Civilian employment of economic sector of UK shows high employment in
INDUSTRY
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