Question

List and discuss several of the reasons behind the growth in services. Which of these do you consider to be the most important? Why?

Answer 1

Ans. The major factors responsible for the high growth of services are as follows. Rise in income Rise in per capita income is an indicator of increase in general affluence levels. Increase in wealth, where has been an increase in the demand for those services, which the customers used to perform by themselves. Services provided y the gardner,servants,car driver etc are sone example. More leisure[free time] has lead to an increase in those services which are related to entertainment. For example tourism industry has grown because of more leisure time available to the people Greater life expectancy- increase in the average life of the people, there hs been an increase in the service which is related to field of health care. Medicl services, pathology labs, nursing homes are some of the examples. Greater complexity of the product. With the growing complexity of the product, there hs been an increase in the services which are indirectly supporting the maintenance of these complex products, Air conditioners, car, computer and other copmlex products require service in every interval of time, are some examples. Increasing number of new products invented will lead to growth in the service sector. Invention of computer in the 21st century has lead to software industry wchich is totally a service industry. Development of means of transport and communication due to globalisation is another form of growth of service. Expenditure on the development of infrastructure. Development of banking and insurance sector due to the policy of privatization. Rapid industrialisation, development of agriculture due to Green Revolution are leads to the development of services such as trade, transport, storage etc.  These are some of the reasons behind the Growth in services. Main reason behind the growth of service, include rapid urbanisation and the expansion of the public sector leads to an increase in wealth[money] and increased demand for intermediate and final consumer services. That is the key factor for the growth of demand for servoces is the economic affluence. The rural and urban household in the upper income category is growing at a faster pace. The economic liberalisation process has had a positive impact on the households. There income as well as their expenditure has been pushed, creating a demand for many goods and services.