Chapter 6 Tertiary and Quaternary Activities

Types Of Tertiary And Quaternary Activities

All economic activities contribute to obtaining and utilizing resources essential for human survival. These activities are classified into primary, secondary, tertiary, and quaternary sectors based on their nature and the stage of resource processing.

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Introduction

While primary activities involve direct interaction with the environment and secondary activities transform raw materials into tangible goods, tertiary activities are related to the service sector. They primarily involve the provision of services rather than the production of physical goods.

Manpower is a critical component of the service sector. Most tertiary activities rely heavily on the specialized skills, experience, and knowledge of individuals, such as professionally trained experts, consultants, or skilled laborers. This distinguishes them from secondary activities, which often rely more on production techniques, machinery, and factory processes.

In the early stages of a country's economic development, a larger proportion of the workforce is engaged in primary activities. As an economy develops, employment shifts towards the secondary and, significantly, the tertiary sectors. In highly developed economies, the majority of the workforce is employed in providing services.

Tertiary activities encompass both the production (provision) and exchange (trade, transport, communication) of services. The output is often measured indirectly, for example, in terms of wages and salaries earned by service providers. Common examples of people engaged in tertiary activities include plumbers, electricians, technicians, launderers, shopkeepers, drivers, teachers, doctors, and lawyers.

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Types Of Tertiary Activities

Tertiary activities include several distinct categories:

• Trade and Commerce: Involves the buying and selling of goods and services for profit. This includes all retail and wholesale trading activities. Trading centres can be found in both rural and urban areas, acting as points for collection and distribution. Rural markets, including periodic markets held on specific days, serve local needs. Urban markets are more specialized, offering a wider range of goods, manufactured products, and professional services (teachers, doctors, lawyers, etc.).
  • Retail Trading: Selling goods directly to the final consumer. This occurs in fixed stores but also includes non-store retailing methods like street vending, door-to-door sales, mail order, telemarketing, vending machines, and e-commerce (internet sales). Large-scale retail innovations include consumer cooperatives, departmental stores (offering a wide variety of goods under one roof with separate departments), and chain stores (multiple outlets selling standardized goods, benefiting from bulk purchasing).
  • Wholesale Trading: Involves buying goods in bulk from manufacturers or producers and selling them to retailers or other businesses, rather than directly to consumers. Wholesalers often play an intermediary role and may provide credit to retailers.
• Transport: A service that physically moves people, materials, and finished goods from one place to another. It is a vital organised industry meeting the need for mobility. Efficient transport systems are essential for modern production, distribution, and consumption, significantly enhancing the value of goods by making them accessible where needed.
  • Transport Distance: Can be measured in different ways: linear distance (km route length), time distance (travel time), and cost distance (expense). Time and cost are often the decisive factors in choosing transport modes. Maps can use isochrone lines to show areas reachable in equal travel time from a point.
  • Network and Accessibility: Transport systems form networks of nodes (meeting points, origins, destinations, towns) linked by links (routes connecting nodes). A well-developed network indicates good connectivity and accessibility between places.
  • Factors Affecting Transport: Demand is influenced by population size. Routes depend on the location of settlements and industries, trade patterns, geographical features (landscape, climate), and the resources available for building infrastructure.
• Communication: Services involved in transmitting words, messages, facts, and ideas. Historically linked to transport (mail carried by physical means). Modern communication technologies have revolutionised this, significantly increasing speed and reducing the dependence on physical transport for immediate messages.
  • Telecommunications: Rapid transmission of messages over distance. Includes telephones (mobile telephony making it direct and instantaneous), telegraph (now largely obsolete), and telex.
  • Mass Media: Transmitting news, pictures, and information to large audiences (radio, television, newspapers). Important for information dissemination, advertising, and entertainment.
  • Satellite Communication: Relays information globally, including data from space and concerning Earth.
  • Internet: Has transformed global communication, providing widespread access to information and communication tools. Despite technological advancements, older systems like postal services remain relevant for handling large volumes of mail due to their cost-effectiveness.
• Services: A broad category covering a wide range of activities provided at different levels, catering to industry, people, or both.
  • Levels of Services: Range from low-order services (common, widespread, simple, like grocery shops, laundries) to high-order services (more specialised, less common, requiring greater skill, like those of accountants, consultants, physicians).
  • Types of Labor: Can involve primarily physical labor (gardener, launderer, barber) or mental labor (teacher, lawyer, physician, musician).
  • Regulation: Many services vital for public welfare are regulated, supervised, or provided by governments or corporations (e.g., highways, fire fighting, education, utilities like energy and water).
  • Professional Services: Require specific professional training and certification (e.g., healthcare, engineering, law, management).
  • Recreational and Entertainment Services: Location often depends on proximity to markets or availability of suitable land (e.g., multiplexes in city centers, golf courses on cheaper land outside the center).
  • Personal Services: Provided to individuals to help with daily tasks (housekeeping, cooking, gardening). Often performed by unskilled workers migrating from rural areas, this segment is generally unorganised. A famous example is Mumbai's dabbawala service, providing meal delivery.

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People Engaged In Tertiary Activities

In modern economies, service workers constitute the largest proportion of the workforce. While services are provided in all societies, developed countries have a significantly higher percentage of their population employed in the tertiary sector compared to less developed countries. The trend shows increasing employment in services globally, often alongside stagnant or decreasing employment in primary and secondary sectors.

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Some Selected Examples of Tertiary Activities

Two prominent examples of growing tertiary activities are Tourism and Medical Services.

• Tourism: Travel for recreation. It has become one of the world's largest tertiary activities in terms of employment and revenue. It supports related local services like accommodation, transport, entertainment, retail, and craft industries. Tourism can be seasonal or year-round depending on the region and its attractions.
  • Tourist Regions: Popular destinations include warm coastal areas (Mediterranean, West Coast of India), mountainous regions for winter sports, scenic landscapes, national parks, and historic towns with monuments, heritage sites, and cultural activities.
  • Tourist Attractions: Factors that attract tourists include favourable climate (warm, sunny weather or snow cover), attractive landscapes (mountains, lakes, coasts, natural scenery), history and art (ancient sites, historical towns, monuments), and culture and economy (ethnic customs, affordable travel/stay options like home-stays).
• Medical Services for Overseas Patients (Medical Tourism): People traveling to other countries for medical treatment, often combining it with tourism. This is a growing sector, benefiting countries like India, Thailand, Singapore, and Malaysia, which offer world-class medical facilities at competitive costs. Medical tourism is specifically defined as combining international tourism with medical treatment. Beyond treatment, there's a trend of outsourcing medical services like interpreting radiology images or medical tests to countries with skilled professionals.

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Quaternary Activities

Quaternary activities are a subdivision of the service sector that focuses on knowledge-oriented tasks. They involve the collection, processing, and dissemination of information, research, and development. This sector requires specialized knowledge, technical skills, and cognitive abilities.

Along with the tertiary sector, the quaternary sector is a major driver of economic growth in developed economies, replacing primary and secondary employment as the primary base. Over half the workers in developed countries are engaged in the 'Knowledge Sector'. There is high demand for information-based services like those provided by fund managers, tax consultants, software developers, and statisticians.

Professionals in offices, educational institutions, hospitals, research centers, accounting firms, and brokerage houses are part of this sector. Similar to some tertiary services, quaternary activities can be outsourced. They are not geographically tied to resources, environmental factors, or physical markets in the same way as primary or secondary activities.

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Quinary Activities

Quinary activities represent the highest level of services, often referred to as the 'gold collar' professions. This sector focuses on the creation, rearrangement, and interpretation of new and existing ideas, data interpretation, and the use and evaluation of new technologies.

These are highly paid skills often held by senior executives, top government officials, leading research scientists, financial advisors, and legal consultants. Despite their small numbers, they play a crucial role in the structure and development of advanced economies due to their decision-making and innovative roles.

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Outsourcing

Outsourcing (or contracting out) involves hiring an external agency to perform tasks that were previously done in-house. This is done to improve efficiency and reduce costs.

When outsourcing involves transferring work to overseas locations, it is specifically called off-shoring, although the terms are often used interchangeably.

Commonly outsourced business activities include Information Technology (IT) services, Human Resources (HR), customer support (call centers), and sometimes manufacturing and engineering tasks.

Outsourcing of services like data processing and call centers is often directed towards countries where there is a readily available supply of skilled labor with good English language skills at lower wages compared to developed countries (e.g., India, China, Eastern Europe, Philippines). Lower overhead costs in these locations also contribute to the profitability of outsourcing.

Outsourcing creates new job opportunities in the countries that receive the outsourced work. While it can potentially reduce emigration from these countries by providing local employment, it can also face resistance from job seekers in the countries where jobs are being outsourced from.

A newer trend is Knowledge Processing Outsourcing (KPO), which is distinct from Business Process Outsourcing (BPO). KPO involves tasks requiring higher levels of skill, expertise, and judgment, such as research and development (R&D), e-learning content creation, business research, intellectual property (IP) research, legal services, and banking sector support. KPO is information-driven and allows companies to access specialized knowledge and create new business opportunities.

Home-shoring is an alternative to off-shoring, involving outsourcing work to different locations within the same country.

The text also mentions different "collar" names associated with types of work:

Colour of the collar	Nature of work
Red	Primary activities (outdoor manual labor)
Gold	Quinary activities (highest level decision-makers, highly specialized skills)
White	Quaternary activities / Professional services (office-based, intellectual, skilled professionals)
Grey	Skilled technical workers (e.g., technicians, IT support) - often associated with service or manufacturing sectors.
Blue	Secondary activities / Production workers (manual labor in manufacturing, factories)
Pink	Service workers in traditionally female-dominated jobs (e.g., caregiving, hospitality, retail)

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Digital Divide

The rapid advancements in Information and Communication Technology (ICT) have created significant opportunities, but these opportunities are not evenly distributed globally. The gap between countries that have advanced access to and benefits from ICT and those that lag behind is known as the digital divide. This divide reflects underlying economic, political, and social differences.

The digital divide exists not only between developed and developing countries but also within countries. For instance, urban metropolitan centers often have much better digital connectivity and access compared to rural or peripheral areas within the same nation.

The future involves addressing this divide to ensure broader and more equitable access to and benefits from the digital world for all citizens.