Emergence of Service Economy

Emergence of the service economy In this fast changing world, service industries have already overtaken goods industries in the wealth creation process at least in the developed countries. Manufacturing industries grew because they produced tangible goods which satisfied people’s physiological needs of food, shelter and clothing. As the basic needs was fulfilled there was demand for improved satisfaction, and this led to a proliferation of variations of the same product and a number of companies involved in its manufacture. The growth of service industries can be traced to the economic development of society and the socio-culture changes that have accompanied it. Service sector is also one of the fastest growing sectors of Indian economy. One in two Indians earn their living from service sectors. This is a much diversified sector ranging from neurosurgeons to house maids. Three related events of 1990’s gave boost to service sector. Globalization of business and consumers taste powered boom in accountancy, law, entertainment and retailing. Explosion in IT sector fuelled sectors like telecom, software, finance and banking. The restructuring of manufacturing and stagnant agriculture further provided fuel to Indian economy to jump from agriculture to services. In order to fully understand what service economy means and what its real challenges are, it is important to understand what are the reasons that are causing its emergence are. The following are the reasons for the emergence of service industries: Increasing affluence- Greater demand for services (activities which consumers used to perform themselves) such as interior decoration, laundry, care of household products such as carpets, care of garden etc. More leisure time- Greater demand for recreation and entertainment facilities, travel resorts, adult education and self improvement courses. Higher percentage of women in labour force- Greater demand for crèches,