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8. Services
Services
General definition according to conventional economic theory: intangible goods (the
nonmaterial counterpieces of goods). A service provision does not result in ownership; it is a
process that leads to a change in costumers, a change in their physical possessions or
intangible assets.
Conventionally described as the tertiary sector of the economy. The tertiary sector:
‘Economic activity concerned with the exchange and consumption of goods and services. It
includes all those activities associated with commerce and distribution (wholesaling and
retailing), the provision of business, personal and professional services, as well as transport
and entertainment services.’1
Services are now qualified into belong to the tertiary, quaternary and quinary sectors.
Quaternary sector: ‘Economic activity which specialises in the assembly,
transmission and processing of information and in the control of other
business enterprises. It includes the professions (e.g. solicitors, accountants,
management consultants), finance (banking, insurance, etc.), intellectual
services such as education, research and the media, as well as public
activities like central and local government.’ 2
Quinary sector: health, education, culture, research, police, fire service and
other government services not intended to make a profit.
Main activities in the sector of services:
Trade: wholesaling and retailing
Transport: land, water and air transport
Tourism
Finance
Education
Research
Health
Government (local and central) services
Economic significance:
World:
Share in the GDP: more than 60% of the total GDP of the world
Share in the labour force: 1/3 of the total occupied population of the world
EU:
Share in the GDP: 71.1% (2008 est. F)
Share in the labour force: 68.3% (2005 est. F)
EU Policies concerning services
Transport
1
2
PDOHG 468-9
PDOHG 387-8
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Treaties of Rome: already stressing the importance of a common transport policy. Common
transport market (freedom of services and the opening of transport markets) – realised, with
the exception of rail transport
Internal market, discontinuation of internal borders, falling transport prices (<opening and
liberalisation of markets), technological changes > constant growth in transport – model of
‘sustainable mobility’. Two sets of goals:
safeguarding fairly priced and efficient mobility for people and goods
coming to terms with increased traffic and the minimisation of its
consequences (accidents, diseases, noise, traffic jams)
Road transport:
international freight transport: 1993 – abolishing of quantitative restrictions
and price regulations; only qualitative requirements for a carrier to be granted
a Community authorisation; introduction of cabotage (the operation of
transport services within a Member State by a carrier established in another
MS)
international passenger transport: slower process of opening up the market;
Community licence required for carriers
national transport: opening of the market since 1997; exceptions: national
services operated independently of an international service and urban,
suburban and regional services (these are not yet open)
Rail transport:
principle: the right of access to the infrastructure in other Member States
opening up the market by ‘railway packages’ (sets of regulations concerning
freight and passenger transport)
1996: strategy for revitalising the railways – the railway packages have
contributed significantly to this
Urban, suburban and regional services:
often falling under the scope of public service obligations in the Member
States and thus often provided by public companies
competition to be achieved by compulsory public tendering
Air transport:
Sea transport:
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a Community aviation market since 1997
harmonisation of professional requirements
free access to markets
Open Skies Agreements with third countries
1986: freedom to provide services to maritime transport
1992: liberalisation of cabotage
free access to services in ports (opening up port services for competition) –
proposals rejected by the EP
Inland waterway transport:
extremely energy-efficient and the most environmentally-friendly form of
transport
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more than 35,000 km of inland waterways (Euro25: 18 Member States have
inland waterways)
currently accounts for 7% of transport
2000: fully liberalised market
Intermodal transport:
‘a transport system whereby at least two different modes are used in an
integrated manner in order to complete a door-to-door transport sequence’
priority: to integrate the more environmentally-friendly modes of transport
into the transport chain more effectively (>rail transport, inland waterway
transport, short sea shipping)
change of mode: extra costs
Research and development
It is among the most important elements of the contemporary economy – innovation is vital
for competitiveness. Principal targets: industry (especially lead industries) and services;
infrastructure
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already a part of the earliest treaties
1974 Council Resolutions – coordination of national policies, the need for the
Community to have its own science and technology policy
SEA: new and explicit basis for research and development policy (RTD –
research and technological development) based on multi-annual Framework
Programmes
Article 164 of the EC Treaty:
Community activities:
(a) implementation of research, technological development and demonstration
programmes, by promoting cooperation with and between undertakings, research
centres and universities;
(b) promotion of cooperation in the field of Community research, technological
development and demonstration with third countries and international organisations;
(c) dissemination and optimisation of the results of activities in Community research,
technological development and demonstration;
(d) stimulation of the training and mobility of researchers in the Community.
Article 165:
The Community and the Member States shall coordinate their research and technological
development activities so as to ensure that national policies and Community policy are
mutually consistent.
Tourism
An integral part of the European economy – around 2 million enterprises, primarily small and
medium-sized ones.
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share in the GDP: 4%
share in the labour force: 4% – about 8 million jobs
generating considerable demand for transport services
significant contribution to employment
main action areas identified by the Council in 1999:
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Furthering the exchange and dissemination of information;
Improving training and qualifications in the tourism sector;
Improving the quality of products and services related to tourism;
Promoting environmental protection and the sustainable development
of tourism.
Appendix:
Eurostat – Statistics in focus. 78/2008. Industry, trade and services (Pekka Alajääskö) – Main
features of the EU-27 services sector. KS-SF-08-078-EN-N
<http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-08-078/EN/KS-SF-08-078EN.PDF>