Service industries are comprised of different companies that primarily earn their revenue from offering intangible products and services. Economists divide all economic activity into two broad categories; goods and services.
Companies providing services can be involved in transport, food services, retail, distribution as well as professional services such as engineering, computer software development, medicine and all government services, including administration of justice and defence. Goods-producing industries include mining, manufacturing, agriculture and construction; each of them creates a tangible object, unlike service industries.
Less developed countries will have their economy dominated by goods services as listed above, and a services-dominated economy is much more characteristic to that of economically developed countries.
The 20th century saw steady growth in the world economy’s inclusion of services, with more than half of USA’s gross domestic product (GDP) coming from its service sector in 1929. By 1978 this had grown to two-thirds and more than three-quarters by 1993! Staggeringly, by the early 21st century it had accounted for over three-fifths of the global GDP and was responsible for employing more than one-third of the labour force worldwide.
The growth of service industries can be explained through advancements in mechanized goods production; machines allow companies to employ smaller workforces to produce tangible goods.
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