UNIT 5: THE GEOGRAPHY OF SERVICES

1 SERVICES AROUND THE WORLD

THE GROWTH OF THE SERVICE SECTOR

The tertiary sectir is made up of activities that provide public and prvate
services: shops, museums, schools, hospitals, etc.
Throughout history, most of the population worked in manufactoring,
agricultura and food production. However, at the beginning of the 20 th
century, many of these workers startedmoving into the service industry.
The growth of the tertiary sector , or service sector, has resulted in what we
call the tertiarisation of the economy. This is typical of post-industrial
societies, where the economy is base don science, technology and
innovation.
The process has been more intense in more prosperous countries and
regions, due to a number of factors:
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Higher incomes and better living standars. When people earn more,
they spend more on services.
The spread of the welfare state, where the government is responsable
for basic services (education, healthcare, social welfare, etc), which it
pays for with taxes.
The use of new technologies in industry, including new forms of
engineering, information technology, design, dvertising and
marketing services.
The development of financial capital markets, which has increased
the number of companies, Banks and insurance companies.

REGIONAL DIFFERENCES IN TERTIARISATION

The growth of the service sector is linked to the modernisation of the
econmy. According to the Human Development Index (HDI), there are four
groups of contries.
-

Countries with very high HDI:

Services accoun for a large share of the economy. More than 75% of
workers in various western European countries, the United States and
Australia are employed in tertiary sector activities. The process isless
marked in Germany, Italy and Japan, where industry is still extremely
important.

Countries with mdium HDI:

The growth of services is explained by the presence of social groups

with a lot of purchasing power, and especially by the need to employ
large numbers of workers with little education or training. Services
become a refuge industry: poorly-paid. Low-productivity jobs in the
government, military, transport, domestic service, ect.

Countries with high HDI:

Tertiarisation is intense due to the rapid increase in the urban
population, especially in Latin America, Eastern Europe and Russia.

Countries with low HDI:

Fewer than 25% of jobs are in the tertiary sector. However, the
percentage is higher if we include the millions of people who work in
the informal or underground economy, which is not regulated by law.

2 A WIDE VARIETY OF SERVICES

CLASSIFYING SERVICE INDUSTRY ACTIVITIES
The service industry includes a wide range ofactivities so it is good to
classify them in the following ways:
-

Based on who operates them:

The services are classified according to who is the supplier:
o Private services: provided by companies with the aim of
making a profit.
o Public services: provided by government bodies and paid
for with money collected in taxes. The purpose is to
guarantee access to basic services, such as healthcare
and education.

Based on function:
The services are classified according o what they are used for:
o Business services: provided to meet the needs of
businesses (for example, legal advice, advertising and
R&D/ R&D&I).
o Consumer services: people buy services or goods (for
example, information, repairs, leisure, cultura, restaurants
and hotels).
o Social services: related to healthcare, education, the law
and public administration.

o Distribution services: related to transport, trade and

communications.
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Based on the level of skill required:

The services are classified according to how much education or
training the workers who perform the services have:
o High-skill services are those that require highly trained
employees.
o Low-skill services are those do not require a lot of training
or education.

THE LOCATION OF SERVICES

Services are located in many different places, depending on the type
of activity they involve.
-

Finantial activivities and advanced business services tend to be

concentrated in large meropolises, and within them, in
businness districts (Manhattan in New York, Ginza in Tokyo, la
Dfense in Paris, the City in London,
Gran va/ Nuevos
Ministerios,/Chmartn-Plaza Castiila en Madrid,
Avenida
Diagonal y Ensanche en Barcelona etc..) these highly
specialised services are located closet o the central headuarters
of multinational companies.
Government and basic social services are the most widely
dispersed in any geographic area, as almost every municipality
has some activity of this type: town councils, schools, medical
facilities, etc.
Trade and public services need to be closet o their customers
and users. Their location is determined by population density
and market potential.

The development of new forms of trade and leisure have led to

changes in our consumption habits. As as result, new, commercial
areas and leisure zones with very similar characteristics have
emerged in countries all around the world. These have changed the
traditional location of certain services.
3 TRADE
TRADE AND THE DISTRIBUTION CHANNELS
Trade is essential to the service industry and the functioning of the
market economy. It is made up of activities involving an Exchange,

which brings producers into contact with consumers via distribution

channels. These channels can be divided into two types of trade:
- Wholesale; companies buy large quantities directly from
producers to sell to shops, without direct contact with
consumers.
- Retail: establishments buy from wholesalers in order to sell,
usually in shops, in samll quantities and directly to consumers.
Distribution channels can also connect producers and consumers in
different countries. In international trade, exports are the goods that a
countrys companies sell abroad. Imports are goods purchased from
abroad. The monetary difference between exports and imports is
called the balance of trade.
FACTORS AFFECTING THE LOCATION OF RETAIL TRADE
Shops are located where there are potental customers and have
certain characteristics depending on the type of population centre the
service is for:
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Villages and towns :

o Number of shops: few establishments with a limited
selection of products.
o Level of specialisation: very simple shops selling basic
necessities.
o Market area: Does not usually extnd beyond the limits of
the municipality.
Small cities:
o Number of shops: A large number and variety of
commercial establishments.
o Level of specialisation: There are some establishments
specialising in higher quality goods at a higher price;
clothing, furniture and sports shops, cars, ect.
o Marke area: Extends to the towns surrounding this type of
city.
Large cities:
o Number of shops: A large number and variety of
commercial establishments.
o Level of specialisation: There are shops that sell luxury or
very specialised tems, including internacional boutiques,
scientific instrument suppliers, ect.
o Market area: It is very expensive, with many people
travelling to large cities when they want to buy expensive
products or obtain specialised services.

TYPES OF RETAIL TRADE

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Small shops:
They are usually small family shops which sell a single type of
product over a counter: extiles, shoes, etc. They operate
independently, separate from other shops in their trade or area.

Large retail stores:

Small shops face strong competition from large retail chains and
franchise networks (which hold the operating rights to a
product, activity or trade name, granted by a company for a
specific area).
These are large multinational companies which monopolise a
large part of the business around the world and are able to buy
and sell more cheaply than other retailers. These companies
create three types of retail businesses:
o Hypermarkets:
Large superstores that sell huge quantities of a wide
variety of products using a self-service system. They are
usually located in the outskirts of cities.
o Retail parks:
Several hypermarkets which share the same area, but not
the same building. These spaces also offer leisure
activities.
o Shopping centres:
Made up of a single building containing a hypermarket,
small shops and lots of leisure activities.

4 TRANSPORT
Like trade, transport is essential to the functioning of the economy.
Todays economic model is characterised by heavy passenger and
goods traffic on different means of transport, as transport is now more
efficient, faster and cheaper than ever before.
THE EVOLUTION OF TRANSPORT
It is posible to identify four periods:

Pre-Industrial Era: (Up to the late 18 th century)

During this period, the most common types of transport were:
o Horses and other draught animals pulling carts to
transport people and goods over short distances.
o Sailing ships for trade between countries.

First Industrial Revolution:(From the late 18 th century to the

late 19 th century.)
In the first half of the 19 th century, two means of transport
were introduced which helped to shorten travel times:
o The railway
o The steamship and steamboat.

Second Industrial Revolution: (From the late 19 th century to the

late 2 th century.)
In the early 20 th century, two new means of transport emerged
which radically transformed the sector and many regions:
o The automobile
o The aeroplane

Third Industrial
century).

Revolution: (from late 20 th century to 21 st

More complex systems of transport are being developed with

the aid of technological improvements.
For example, without the Internet and other new technologies, it
would be imposible for major airports to function.
SYSTEMS OF TRANSPORT
Below are the most common types of transport systems in the world.
They compete with each other, but can also operate together in a
coordinated way, promoting intermodal transport, which facilities links
between diffeent systems.
-

Road transport is the most popular because of its ability to carry

people and goods to almost any place on the planet via a
network of roads (such as motorways, main roads).
Rail transport. Last century, prvate vehicles overtook trains as
the most common means of transport. However, high-speed
trains have recently been winning back travellers in moredeveloped countries.

Air transport is the most modern system. Aeroplanes have been

a crucial element in reducing geographical distances in terms of
time.
Sea transport has been the most important system of transport
for the international goods trade throughout history. Today, it is
still the least expensive way to transport large quanities of
products of any kind.

5 THE TOURISM INDUSTRY

Tourism is a mass phenomenon of leisure which moves and employs
huge numbers of people around the world.
REASONS FOR THE GROWTH OF TOURISM
The origins of tourism date back to antiquity, but it only became
widespread in the 20 th century. This was due to:
- Higher living standars and more free time: paid holiday time, a
five-day working week and an earlier retirement age.
- Improvements in transport and communications, which reduce
travel costs and time.
- Greater availability of accomodation, which prices and
facilitiessuited to any budget.
- Development of large specialised companies, such as tour
operators and travel agencies.
FACTORS PROMOTING TOURISM
Some countries are more attractive to tourists and encourage tourism
due to the folowing factors:
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Accessibility of the country or tourist area from the rest of the

world.
Security and political stability of the area, with low crime rates
and no armed conflicts.
Natural and cultural heritage, with protected natural areas or
national heritage (monuments, historical spots or traditinal
festivals).
A local population who welcome tourists.

EFECTS OF TOURISM
Tourism has a considerable impact on areas that receive visitors, with
the following effects:
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Demographic. Tourism increases the population in host areas,

with young people seeking work and retired people who settle

there permanently. It also helps slow population decline in rural

areas that are attractive to tourists, such as mountain areas or
historical villages.
Economic: Tourism generates wealth and jobs. However, it also
influences transport policy, as the construction of major
infrastructural elements, such as roads and airports, is focused
on meeting the needs of tourists.
Social. Tourism encourages contact between cultures and
contributes to the modernisation of host societies. However,
tourism can also have negative effects: the loss of local
customs or a decline in the quality of life for locals, due to the
oversaturation of services.
Environmental. The construction of some ourist infrastructures
has damaged ecosystems, which are subjected to pollution,
noise and build-up of rubbish.

6 DIFFERENT TOURIST DESTINATIONS

The main tourist destinations can be classified according to the criteria
listed below.
THE SERVICES THEY OFFER
There are two main groups of tourist destinations. Some tourist services can
be found in both groups, but services are usally typical of one or other type
of tourism.
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Urban o cultural tourism:

Cities offer various different attractions:
o Urban business and conference tourism, which includes
business travel and leisure activities. It is associated with
luxury hotels, conference centres, auditriums, etc.
o Universal exhibitions or major sporting events, like the Olympic
Games, which concentrate activities in venues built for this
purpose and receive millions of visitors.
o Theme parks promoted by large multinational companies, such
as Disney World in Orlando (Florida).
o Urban historical and cultural tourism is associated with
museums, historical monuments and theatres.

Natural or cultural tourism:

This type of tourism offers a number of attractions:
o

Unique types of accomodation in rural areas such as

refurbished houses or farms.

o
o
o

Agriculture and livestock or artisanal activities, such as

experiencing life on a farm or purchasing artisanal products.
Natural spaces for people seeking peace and environmental
quality.
Historical and cultural heritage, enabling certain areas to
attractlarge numbers of people.

SEASONALITY
There are essentially two types of destination, which dependo n the
seasons, and their popularity depends on the time of year.
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Beach holidays:
This type of tourism depends on two environmental conditions: a
pleasant climateand coastal areas suitable for swimming. In addition,
these areas also offer tourists amusements, relaxation and
entertainment.
This is the option chosen by the majority of tourists around the world.
It is also the activity tha generates the most revenue and has the
greatest capacity for creating jobs (hotels, restaurants, shops, etc..).

Mountain tourism

Mountain tourism offers contact with an unspoilt natural environment

and the opportunity for sports such as:
o

Mountaineering, climbing and hiking in the mountain ranges of

different countries. Tourist attractions also include adventure
sports such as mountain biking, canyoning and paragliding.
Winter sports at ski resorts, which have the infrastructure
necessary to allow tourists to spend their entire holiday at the
resort.