Discuss the significance and growth of service sector in modern economic development
Answers
Role of service sector in modern economic development:
- Holds the highest share in the country's Net National Product.
- Promotes Industrialization.
- Enhances network facilities.
- Growth of agriculture and production.
- Increase in the productivity of the goods.
- Increased trade leading to better market growth.
- Provides technical education and enhances the quality of service.
Explanation:
Role of Service Sector in Economic Development
In any country economic development depends on the growth and evolution of the three sectors of the economy. However in recent years the service sector growing at a very faster rate in the developing countries and is contributing a major share in terms of output, income and employment. Even the productivity per worker is becoming higher in service sector when compared to agriculture and industrial sectors. Already the service sector is dominant in the developed countries. If agriculture sector is stagnant, new service activities are emerging and adding to the service sector making the economy to grow. Hence service sector is playing a major role in economic development of any country.
The importance of the services sector can be gauged by its contributions to different aspects of the economy.
Business include both domestic trade as well as foreign trade. Trade as a service sector activities facilitates the exchange of the goods and services between producers and consumers. Domestic trade refers to the exchange of goods and services with in the country. Which provides income and employment to the people who have engaged in this activities. Foreign trade plays a major role in the development of the country. Imports of machinery and equipment which cannot be produced in the initial stages at home are essential. Such imports which either help to create new capacity in some lines of production or enlarge capacity in the other lines of production are called developmental imports. The imports which are made in order to make a full use of the productive capacity are called maintenance imports.