Global Economic Pillars: Services, Trade, and Transport Networks

Growth of the Tertiary Sector

Services consist of all activities which do not directly produce tangible goods, but help to satisfy people's wants and needs.

Developed countries have experienced tertiarization, a significant shift towards the service sector. Today, services provide over 70% of wealth and employment in developed countries.

Types of Services

Services can be classified into two main groups:

• Public services are financed by the state from taxes.
• Private services are offered by private companies or individuals.

Service Location and Outsourcing

Traditionally, services have mainly been located in urban areas. Many advanced services, involving new technologies, are located in business districts within metropolitan areas. Improvements in international communications and transport have led to outsourcing. This process involves the transfer of services, such as information technology, from developed economies to regions where labor is cheaper.

Fundamentals of Trade

Trade is the exchange of goods and services between producers and consumers. In many countries, it is the most important type of service in terms of turnover and the number of workers employed.

Trade depends primarily on three key factors:

• Transport and Infrastructure: Places with good communications, such as cities, facilitate the most trade.
• Market Size: This refers to the number of consumers who can purchase goods or services. There is more trade if the market is larger.
• Wealth: If people have greater purchasing power, they will consume more.

Balance of Trade Explained

If the value of a country's exports is greater than the value of its imports, its balance of trade is positive (favorable).

Transport Network Essentials

A transport network is the infrastructure necessary for vehicles to circulate. It consists of a series of nodes (e.g., cities, stations) and axes (or lines) which connect these nodes.

The level of development of a transport network is mainly measured by the degree of connectivity between the nodes:

• Developed countries have a dense, structured, and hierarchical network.
• Less developed countries have a less dense and less structured network.

Land Transport Systems

• Road Transport: It is expensive to build and maintain roads.
• Rail Transport: Includes trains, metros, and trams, including high-speed trains. Rail can transport goods efficiently and is often cheap, fast, and safe.