Chapter 6: Tertiary And Quaternary Activities

• Services are special skills or work provided in exchange for payment; healthcare, education, law, governance and recreation often require professional knowledge and training.
• Workers are central to this sector: many services are performed by skilled labour, trained professionals and consultants.
• Production means providing services that are consumed; its output is measured indirectly through wages and salaries.
• Exchange includes trade, transport and communication, which help overcome distance.
• Examples include plumbers, electricians, technicians, launderers, barbers, shopkeepers, drivers, cashiers, teachers, doctors, lawyers and publishers.
• Economic development shifts employment patterns: primary-sector work is more common in early development, while tertiary employment dominates in developed economies; a moderate share works in the secondary sector.
• Compared with secondary activities, tertiary work relies more on specialised skills, experience and knowledge than on machinery, production techniques and factory processes.

• Trading centres are towns or cities where trade takes place. Trade developed from local barter to money-based exchange on an international scale, creating collection and distribution centres.
• Marketing centres are classified as rural or urban according to the goods and services they provide.

Periodic Markets

• Location: common in rural areas that lack regular markets.
• Operation: held on specified dates at set intervals, such as weekly or biweekly; markets may move from one place to another.
• Purpose: bring together nearby people to meet demand accumulated between market days; travelling shopkeepers can serve a large area.

How Wholesale Trade Works

• Supply chain: most retailers obtain goods through wholesalers, though some large stores and chains buy directly from manufacturers.
• Credit: wholesalers may extend substantial credit, allowing retailers to operate largely on the wholesaler’s capital.

• Purpose: transport meets the need for mobility and supports the production, distribution and consumption of goods.
• Economic effect: transportation significantly enhances the value of materials at different stages of the system.
• Modern requirement: societies need speedy and efficient transport systems.

Transport Networks and Accessibility

• Choice of transport: time or cost distance can determine which mode is selected.
• Isochrones are map lines joining places that take equal time to reach.
• Network: a system of connected transport routes made up of nodes and links.
• Node: a meeting point of two or more routes, a route’s origin or destination, or a sizeable town along it.
• Link: a road joining two nodes; a network with many links connects places more effectively.

• Traditional link to transport: writing preserved messages that were carried by people, animals, boats, roads, railways and aircraft; transport routes therefore also act as lines of communication.
• New technologies: mobile telephony and satellites have made many communications independent of transport, but older systems remain important because they are inexpensive.
• Postal services: large volumes of mail continue to be handled by post offices around the world.

• Service levels: low-order services, such as grocery shops and laundries, are widespread; high-order services, such as accounting, consultancy and physicians’ services, are more specialised.
• Labour type: gardeners, launderers and barbers mainly perform physical labour; teachers, lawyers, physicians and musicians mainly perform mental labour.
• Users: services are provided to individual consumers who can afford to pay, as well as to industry.

Personal Services: Example from India

• Domestic work includes housekeepers, cooks and gardeners.
• Mumbai dabbawala service delivers tiffin meals to about 1,75,000 customers across the city.

Tertiary activities and employment

• Tertiary activities provide services and are present in all societies.
• Employment pattern: A higher percentage of workers provides services in more developed countries than in less developed countries.
• Trend: Employment in tertiary activities has increased, while employment in primary and secondary activities has remained unchanged or declined.

Scale and economic effects of tourism

• Scale: Tourism is the world’s largest tertiary activity by registered jobs, with about 250 million jobs, and earns revenue equal to 40 per cent of total GDP.
• Local employment: Tourism creates work in accommodation, meals, transport, entertainment and shops serving visitors.
• Wider effects: Tourist demand supports infrastructure industries, retail trade and craft industries, including souvenir-making.
• Seasonality: Some destinations depend on favourable weather during holiday periods; others attract visitors throughout the year.

Homestays as tourism businesses

• Homestays: Heritage homes in Goa, Madikere and Coorg in Karnataka have emerged as profitable accommodation businesses.

Medical services and outsourcing

• India’s role: India has emerged as a leading medical-tourism destination; metropolitan hospitals serve patients from around the world.
• Other beneficiaries: Medical tourism also benefits developing countries such as Thailand, Singapore and Malaysia.
• Medical outsourcing: Hospitals in India, Switzerland and Australia provide services such as reading radiology images and interpreting MRI and ultrasound tests.
• Potential benefit: Outsourcing can benefit patients when it improves quality or provides specialised care.

The Quaternary Sector

• Economic role: Along with the tertiary sector, it has become a major basis of economic growth, replacing much primary- and secondary-sector employment.
• Knowledge sector: Over half of workers in developed economies are employed in knowledge-related work; demand for information services has grown rapidly.
• Examples: Software development, statistics, tax consultancy, mutual fund management and medical transcription.
• Workplaces: Offices, schools, universities, hospitals, doctors’ offices, theatres, accounting firms and brokerages.
• Outsourcing: Quaternary work can be outsourced because it is generally not tied to resources, environmental conditions or a particular market location.

Nature and Importance

• Decision-makers: Performed by senior business executives, government and policy officials, research scientists, and financial and legal consultants.
• Gold-collar professions: These workers use highly specialised, often highly paid skills.
• Economic importance: Their influence in advanced economies is much greater than their share of total workers.
• Difference from quaternary work: Quaternary activities focus broadly on information, research and technical expertise; quinary activities emphasise high-level interpretation, evaluation and decisions.

Knowledge Process Outsourcing (KPO)

• KPO: Information-driven outsourcing that relies on highly skilled workers and specialised knowledge.
• KPO vs BPO: KPO is distinct from Business Process Outsourcing because it involves highly skilled workers.
• Examples: Research and development, e-learning, business research, intellectual-property research, legal work and banking.
• Benefit: KPO can help companies create additional business opportunities.
• New trend: Home shoring is presented as an alternative to outsourcing.

Offshoring and Outsourced Work

• Offshoring: Moving work to overseas locations; outsourcing and offshoring may occur together.
• Common outsourced work: Information technology, human resources, customer support, call-centre services, and sometimes manufacturing and engineering.
• Data processing: IT-related work that can be carried out in countries with skilled workers and lower wages.
• Example: A company in Hyderabad or Manila may complete a GIS project for a client in the United States or Japan.

Where the Divide Occurs

• Between countries: Developed countries have generally advanced faster in providing ICT access, while developing countries have lagged behind.
• Within countries: Metropolitan centres may have better connectivity than peripheral rural areas; this is seen in large countries such as India and Russia.
• Factors: Economic, political and social differences affect how quickly countries provide ICT access and benefits to citizens.