servicesector

The service sector, also called the tertiary sector, encompasses industries that provide services rather than producing physical goods. It includes professional, financial, retail, health and education services, hospitality, information technology services, transportation, and public administration. It varies across countries but generally forms the largest portion of modern economies.

Economic role: In many economies, the service sector contributes the largest share of GDP and employment, reflecting a shift from agriculture and manufacturing toward service-based activities. Services enable other sectors through logistics, communications, maintenance, and business support. Growth is often linked to higher income levels, urbanization, and digitalization.

Composition and examples: Consumer services include retail, food service, tourism, and personal care. Business services cover legal, accounting, consulting, advertising, and IT services. Social services encompass education and health care, while information and communications services involve software, media, telecoms, and data processing. Public administration and defense are typically included as government services.

Measurement and trends: Analysts measure the sector by value added or employment; share of GDP, productivity, and wages vary widely by country. Trends shaping the sector include automation, artificial intelligence, cloud computing, and platform-based business models, which affect productivity and labor demand. Policy considerations focus on education, infrastructure, regulation, labor mobility, and digital inclusion.