Question

How is the tertiary sector different from other sectors? Explain with an example.

Hint:

To compare sectors, write "Goods vs Services," then show how services enable production and distribution, and end with a simple supply-chain example.

Answer 1

Meaning:
The tertiary sector (also called the service sector) provides intangible services rather than producing tangible goods. It supports and enables the activities of the primary (agriculture, mining) and secondary (manufacturing) sectors.
How it differs from other sectors:
1. Nature of output: Primary and secondary sectors produce goods; the tertiary sector supplies services such as transport, banking, education, health, trade, tourism, IT, insurance, communication, repair, etc.
2. Role in the economy: Services facilitate production & distribution—moving goods, financing, marketing, storing, and providing know-how; they are inputs to all sectors.
3. Intangibility & simultaneity: Services are typically consumed as they are produced (no inventory), unlike goods which can be stored.
4. Development pattern: As economies develop, the share of the tertiary sector in GDP and employment generally rises faster than that of primary/secondary.
5. Skill/knowledge intensity: Many services (IT, education, health, finance) are skill- and knowledge-intensive.
Illustrative example (grain to market chain):
- Primary: A farmer grows wheat.
- Secondary: A mill converts wheat into flour or a bakery into bread.
- Tertiary: Transport carries wheat/flour to markets; warehouses store it; banks give loans; insurance covers risk; wholesalers/retailers sell; IT and telecom manage orders and payments.
Thus, the tertiary sector links and supports the other two sectors at every stage.