Already in 1940 the U.S. became a so called “service economy” meaning that more than half of its work force is employed in producing intangibles. By 1975 two thirds of the work force was part of the tertiary sector. The Tertiary Sector, also known as the Service Sector, has become the number one driving force of the U.S. economy during the last decades. According to recent statistics (2002) it nowadays accounts for 78% of the U.S. non-agricultural employment and 76% of the U.S. private sector Gross Domestic Product (GDP). Additionally, the U.S. is the world’s premier services exporter (17% of worldwide services trade) and importer (14% of worldwide services trade) at the same time. These figures alone necessitate a closer look. However, scientist even predict a continuous increase in the relevance of this industry for the U.S. Economy, expecting that almost 100% of additionally created jobs during the next decade will belong to the Service Sector.
This development is even more impressive considering the fact that the Service Sector was a subject almost not worth mentioning in the eyes of scientists up to the 1940s. Adam Smith stated in the 18th century, that services were “unproductive of any value because they do not fix or realize themselves in any permanent subject or vendible commodity which endures after labor is passed”. Another term used for the Tertiary Sector expresses very well the attitude toward this sector: The Residuum Sector, with the residual being the “unproductive labor”. Up to that point in history the merchandise producing industry, the trade of goods – nationally and internationally – and the market’s mechanisms and their expected development in future were the sole focus of economists.
The questions are which factors have lead to the impressive growth of this industry and what will the future hold for it?
This seminar paper will provide a glance at some of the numerous factors, namely the specialization of labor, growth of final demand and growth of goods-producing industries, and will than focus on the development and significance of the Information and Communication Technology for the U.S. service sector.
However, at the beginning the term “service” will be defined and some of its different understandings explained.
Table of Contents
- A) Introduction
- B) The U.S. Service Sector
- I. Definition of Service
- II. Growth in Services
- 1. Specialization of Labor
- 2. Growth of Final Demand
- 3. Growth of Goods-Producing Industries
- III. Tradability of Services
- 1. International Trade of U.S. Services
- 2. Forms of International Trade of Services
- 3. Tradable Services and ICT
- 4. ICT as a Tradable Good
- 5. Gains from International Trade in Services
- IV. Influences of ICT on the U.S. Service Economy
- 1. Productivity
- 2. Outsourcing
- 3. Broader Markets
- C) Conclusion
Objectives and Key Themes
This seminar paper aims to explore the significant growth of the U.S. service sector and the role of Information and Communication Technology (ICT) in shaping its development. It seeks to identify key factors contributing to this growth and analyze the future prospects of this dominant sector of the American economy.
- Definition and evolution of the concept of "service" in economics.
- Factors driving the growth of the U.S. service sector.
- The tradability of services and the role of international trade.
- The impact of ICT on productivity, outsourcing, and market expansion within the service sector.
- The significance of the service sector to the overall U.S. economy.
Chapter Summaries
A) Introduction: This introductory chapter establishes the context for the paper by highlighting the dramatic rise of the U.S. service sector as the dominant force in the American economy. It contrasts the historical underestimation of services' economic value, referencing Adam Smith's view of services as "unproductive," with the current reality of services accounting for a vast majority of U.S. employment and GDP. The introduction poses the central question of the factors contributing to this growth and outlines the paper's focus on key factors like labor specialization and the influence of ICT.
B) The U.S. Service Sector: This chapter delves into a detailed examination of the U.S. service sector. It begins by addressing the challenges in defining "service," showcasing the diverse and heterogeneous nature of activities classified under this umbrella term and highlighting the debate surrounding intangible vs. tangible aspects. The chapter then moves on to analyze the growth in services, exploring three major contributing factors: specialization of labor, growth of final demand, and growth within goods-producing industries. The interconnectedness of these factors and their impact on the overall service sector expansion are critically assessed.
Keywords
U.S. service sector, Information and Communication Technology (ICT), international trade of services, service economy, economic growth, specialization of labor, productivity, outsourcing, tradability of services.
Frequently Asked Questions: A Comprehensive Language Preview of the U.S. Service Sector
What is the focus of this language preview?
This preview provides a structured overview of a document analyzing the growth of the U.S. service sector and the significant role of Information and Communication Technology (ICT) in its development. It includes the table of contents, objectives, key themes, chapter summaries, and keywords.
What topics are covered in the document's Table of Contents?
The document is structured into three main sections: an introduction, a detailed examination of the U.S. service sector (including its definition, growth factors, tradability, and the impact of ICT), and a conclusion. The service sector section further breaks down into subsections covering the definition of service, growth in services (specialization of labor, growth of final demand, growth of goods-producing industries), tradability of services (international trade, forms of trade, tradable services and ICT, ICT as a tradable good, gains from trade), and the influence of ICT on productivity, outsourcing, and broader markets.
What are the main objectives and key themes of the document?
The main objective is to explore the substantial growth of the U.S. service sector and the influence of ICT on its development. Key themes include defining and tracing the evolution of "service," identifying factors driving service sector growth, examining the tradability of services and international trade, analyzing ICT's impact on productivity, outsourcing, and market expansion, and assessing the service sector's overall significance to the U.S. economy.
What are the key takeaways from each chapter?
Introduction: This chapter sets the stage by highlighting the service sector's dominance in the U.S. economy and contrasts historical undervaluation of services with their current economic importance. It introduces the central question of the factors behind this growth and outlines the paper's focus. The U.S. Service Sector: This chapter provides a detailed analysis of the U.S. service sector, defining "service," exploring its growth drivers (labor specialization, final demand, and growth within goods-producing industries), and analyzing the tradability of services and the impact of ICT.
What keywords are associated with this document?
The keywords include: U.S. service sector, Information and Communication Technology (ICT), international trade of services, service economy, economic growth, specialization of labor, productivity, outsourcing, and tradability of services.
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This preview is intended for academic use, supporting the analysis of themes within the full document in a structured and professional manner.
- Citar trabajo
- Dipl.-Kfm. Carsten Reuter (Autor), 2005, The U.S. Service Sector - International Trade of Services and the Information and Communication Technology (ICT), Múnich, GRIN Verlag, https://www.grin.com/document/50089
