WHY SERVICES ARE SO IMPORTANT - Harry Freeman, President, Mark Twain Institute
This site is dedicated to the proposition that the world's service sectors
have become more important but the growth in its importance has not been
accompanied by understanding that growth and the nature of the growth,
reports on it by the media, concerns about it by governments, by academia,
and by the general public. The site can only help in partially understanding
the service sectors of the world; the rest is up to the visitors.
Why such little and late recognition? It is hard to explain the concept of a
service or of service sectors except by negatives. "Services" are not
manufactured goods, not agricultural products, not fishing, not mining, but
do constitutte everything else in an economy. It has also been humorously
defined by The Economist as "something that when you drop it on your feet,
you do not feel it."
Attempts to define "services" extensively always fall short, but here goes:
"Services" includes royalties and fees, financial services, insurance
services, professional services of all kinds, construction services,
electronic commercial services, energy services, maritime services, retailing
and wholesaling, travel and tourism services, telecommunication services,
environmental services, health care services, funeral services, education
services, computer and data processing services, air transportation services,
railroad services, audio visual products, and many others.
Those services comprise nearly 80% of the US economy, even more of the Hong
Kong economy, and above 50% for every country in the world that maintains
such statistics. World trade in services now approaches $l trillion per
year and growing.
Private sector employment in the US is also nearly 80% of all employment.
Why have "services" come over the horizon so recently? One reason is the
size of service sectors have grown so much recently. Another is that trade in
services has only been recognized by multilateral trade rules for just over 5
years. A third reason is that the service sector of a country is so diverse
as to challenge its images. Services include some of the lowest paid services
such as laundry services; and some of the highest paid services such as movie
actors and lawyers. Economists have been largely educated with a
"manufacturing" mindset. After all, what is the symbol for trade on
television? A ship, always. The goods on the ships are goods, not services.
The transportation by that ship is a service.
Approaching the world's service sectors is challenging and it is sometimes
counter-intuitive. It is a different and a new way of looking at economies.
Please join us in this path to greater understanding of service sectors,
whether you be in Chad or China, the US or Uruguay, or Tanzania or Tunisia.
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