A service is any activity that fulfills a human want or need and returns money to those who provide it. The service sector of the economy is subdivided into three types—consumer services, business services, and public services. Each of these sectors is subdivided into several major subsectors. A smaller number of people work on farms or in factories, the primary and secondary sectors
Approximately one-half of jobs in the United States are in consumer services and one-fourth in business services. The remainder are in public services, manufacturing, and agriculture.
The principal purpose of consumer services is to provide services to individual consumers who desire them and can afford to pay for them. Around one-half of all jobs in the United States are in consumer services. Four main types of consumer services are retail, education, health, and leisure.
The principal purpose of business services is to facilitate the activities of other businesses. One-fourth of all jobs in the United States are in business services. Professional services, financial services, information services, and transportation services are the main types of business services.
The purpose of public services is to provide security and protection for citizens and businesses. About 8 percent of all U.S. jobs are in the public sector. Excluding educators, one-sixth of public-sector employees work for the federal government, one-fourth for one of the 50 state governments, and three-fifths for one of the tens of thousands of local governments.
The distinction among services is not absolute. For example, individual consumers use business services, such as consulting lawyers and keeping money in banks, and businesses use consumer services, such as purchasing stationery and staying in hotels. Still, geographers find the classification useful because the various types of services have different distributions, and different factors influence locational decisions.
Services generate more than two-thirds of GDP in most developed countries, compared to around one-half in developing countries. Logically, the distribution of service sector workers is opposite the distribution of primary sector workers
Percentage of GDP from Services
Services account for more than two-thirds of GDP in developed countries, compared to around one-half in developing countries.
However, if services were located merely where people lived, then China and India would have the most, rather than the United States and other developed countries. Services cluster in developed countries because more people who are able to buy services live there. Within developed countries, larger cities offer a larger scale of services than do small towns because more customers reside there.
Geographers see a close link between services and settlements because providing services is a principal reason that settlements exist. A settlement is a permanent collection of buildings where people reside, work, and obtain services. They occupy a very small percentage of Earth’s surface, well under 1 percent, but settlements are home to nearly all humans because few people live in isolation.
Explaining why services are clustered in settlements is at one level straightforward for geographers. In geographic terms, only one locational factor is critical for a service: proximity to the market. The optimal location of industry, described in Chapter 11, requires balancing a number of site and situation factors, but the optimal location for a service is simply near its customers. Thus, a settlement is where customers are clustered.
On the other hand, locating a service calls for far more precise geographic skills than locating a factory. The optimal location for a factory may be an area of several hundred square kilometers, whereas the optimal location for a service may be a very specific place, such as a street corner.
Below shows changes in U.S. employment. All the growth in employment in the United States has been in services, whereas employment in primary- and secondary-sector activities has declined. Within business services, jobs expanded most rapidly in professional services and more slowly in finance and transportation services because of improved efficiency; fewer workers are needed to run trains and answer phones, for example. On the consumer services side, the most rapid increase has been in the provision of health care, education, entertainment, and recreation.
Change in U.S. Employment
Jobs have increased in the tertiary sector, especially consumer services.
In which sectors of the economy do you or members of your family work? If in the service sector, in which types of services are these jobs?