A service economy is a nation that generates more value from services than other sectors such as agriculture and manufacturing. Advanced economies are locked in a long term trend whereby services are becoming a greater percentage of economic output. This resembles the 19th century process of industrialization whereby manufacturing replaced agriculture as the largest sector of the economy in developed nations. The following are common types of value produced by a modern service economy.
The design of virtual environments and physical things. In theory, the design of things could produce more value than their manufacturing.Marketing services in areas such as branding, promotion and distribution.
EcommerceServices that produce value electronically such as a payment service or online retailer.
Software & ComputingSoftware and computing that are offered as a service. This is a large industry with a high growth rate.
Media & InformationMedia and information are increasing shifting towards services such as a streaming media service or ebook service that allows you to check out several books at a time for a monthly fee.
EntertainmentEntertainment such as a film or video game.
RestaurantsRestaurants offer meals as a service.Things to do at night such as a bar or opera.
CultureCultural experiences such as a streaming music service or art museum.Providing access to assets for a fee. For example, a theme park or gym.
Wrapping products in intangible elements such as support, maintenance and operations.
TransportTransport such as a high speed train.Public services in areas such as education, healthcare, wellness, community programs and public space.
Non-ProfitsOrganizations set up to do good, as they see it, as opposed to making a profit. Non-profits usually produce services such as feeding the poor.Business services such as consulting and process outsourcing.
Professional ServicesOffering your labor as a service.Services provided by consumers for consumers without much involvement by a business. For example, a babysitter.
Financial ServicesFinancial services such as borrowing, investing and foreign currency.
InsuranceA service that accepts risk for a fee.
Manufacturing as a ServiceManufacturing itself is often provided as a business or consumer service. Automation potentially allows unique items to be manufactured on demand by providing a design.
EnergyEnergy production and distribution is increasing viewed as a service such as an electrical utility as opposed to a product such as gasoline.
Construction & MaintenanceServices that construct things or maintain them.
OperationsServices that operate things. For example, a facility management service that operates data centers on behalf of corporate clients.
NotesIt is possible that some developing countries will become developed countries without developing a large industrial base. In other words, a nation may progress directly from being an agrarian economy to a service economy. Manufacturing in one form or another will remain an important industry just as agriculture remained an important industry throughout the industrial period. It may become highly automated with few jobs.The knowledge economy is highly related to the service economy. Service jobs tend to require more knowledge and they often produce knowledge. For example, most designers, doctors and software developers work in the service sector.
This is the complete list of articles we have written about business models.
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