The Economic Impact of Tertiary Services and Transport Networks

Why Are Services Important?

The tertiary or service sector of the economy consists of all activities that do not directly produce tangible goods but provide services to satisfy people's wants and needs. These include the work of teachers, doctors, bus drivers, and hairdressers. Developed countries have experienced a tertiarization that has increased the importance of this sector within total domestic production (GDP) and employment. It is now the dominant business sector, providing about 70% of wealth and employment in developed countries.

Why Is Outsourcing Occurring?

For some services, such as call centers or certain IT services, the location of the provider is unimportant. As a result, companies often relocate these services to countries where labor is cheaper. In rich nations, about 20% of existing jobs in the tertiary sector could be outsourced in the near future. India has especially benefited from the outsourcing of Western services due to its low labor costs and the availability of workers with expertise in new technologies and fluency in English.

What Are Transport Services?

Transport is the movement of people and goods from one place to another. This activity is made possible by a combination of human and material elements:

• Modes of transport: Different vehicles used for travel, such as cars, trains, planes, or boats.
• Infrastructure: Elements necessary for transport, including roads, railways, railway stations, airports, and ports. Pipelines, power lines, and telephone lines are also considered transport infrastructure. Most infrastructures have a significant impact on the environment.

The Importance of Transport: Functions

Transport has been one of the fastest-growing tertiary activities in the past two centuries. This is due to industrialization, the increase in trade and travel, and technical advances that have resulted in greater speed, capacity, and safety at lower costs. In today's world, transport has three main functions:

• Economic: Transport allows the exchange of goods and the everyday travel of the population. It contributes to the development of other activities such as industry, construction, trade, and tourism. In a globalized economy, it is a fundamental element of production outsourcing.
• Political: It reinforces the integration of different regions and areas within a territory.
• Social: It facilitates human relations and activities such as leisure and learning about other cultures.

The Formation of Transport Networks

A transport network is the infrastructure necessary for vehicles to circulate. It consists of a series of nodes and axes (or lines) that connect those nodes. The level of development of a transport network is mainly measured by the degree of connectivity between all nodes in a territory. Developed countries typically have a dense, structured, and hierarchical network, while less developed countries often have a less dense and less structured network.