Whereas in the early part of the 20 th century, the United States became the dominant world economy, thanks to its massive manufacturing industry by the early part of the 21 st century, its worldwide economic dominance was based on its massive service sector. By the turn of the 21 st century, it had eclipsed the manufacturing and retail goods sector as the largest sector of the economy in most developed nations. Over the past century, the service sector has rapidly expanded. The fact that the service sector is designated as the tertiary sector should not be in any way taken to mean that it occupies third place in terms of economic importance. Service industries are the last economic sector to experience significant growth and are the hallmark of developed nations and advanced economies. As economies grow and develop, the manufacturing and marketing of finished goods account for the largest portion of economic activity. The most primitive economies consist primarily of economic activities related to raw materials, agricultural production, and fishing. The tri-sector economic theory holds that the three economic sectors, in addition to delineating different areas of economic endeavor, also reflect how economies develop over time.
The knowledge-based economy is focused on utilizing information and communications (such as social media) to provide goods and services specifically tailored to the needs and wants of individual customers or clients.Īn example of the knowledge-based economy in action is a retailer, such as Amazon or Walmart, sending you tailor-made ads for goods or services that your previous purchases or searches indicate that you are interested in.Įconomists who do not use a fourth economic sector category assign the quaternary sector industries to the tertiary sector. Some economists include a fourth sector – the quaternary sector in which they assign the areas of research, information technology, education, consulting, and various other elements of what has come to be known as the “knowledge-based economy.”
It includes industries such as the financial services industry, internet technology (IT), and the healthcare and entertainment industries. The tertiary sector is the service sector. The secondary sector includes all businesses involved in producing and selling goods – such as auto manufacturers, furniture stores, and clothing retailers. It includes mining companies, lumber companies, and oil drilling companies – along with the agricultural and fishing industries. The primary sector is composed of industries engaged in the business of gathering raw materials. The rapid growth of service-related industries has been fueled by increases in knowledge and data, and rapid technological advances – especially, improvements in communication.The service sector is the largest sector of the economy in developed nations.The service sector is the part of the economy that provides various services, as opposed to providing tangible goods such as cars and televisions.
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