What is a Service?
The global trade framework does not provide clear
definitions on what is a good or a service
Service Definitions
A service:
is an activity or series of activities more or less intangible nature, and Mostly takes place in interaction between customer and service employee (but not necessarily) With/without physical resources/ goods/ systems of the service provider, With an aim to provide solutions to customer problems.
SERVICES Intangible in nature Inconsistent product definition Produced & consumed at same time Cannot be inventoried High customer interaction Reselling is unusual Quality difficult to measure Provider/customer, not product is transportable Site of facility important for customer contact.
Hybrid
Pure Service
- Health of the country (GDP): GDP is the market - Employment - Manufacturing sector - International Trade
value of all the final goods and services produced within the country in a given period of time.
The contribution of the services sector to the Indian economy has been manifold: a 55.2% share (excluding construction) in GDP, growing by 10 per cent annually, contributing to about 25% of total employment, accounting for a high share in FDI inflows and over onethird of total exports, and recording very fast (27.4 per cent) export growth through the first half of 2010-11.
GDP
Rep. of Korea
Pakistan
37
46
4
23
20
16
41
23
43
38
55
54
India
55
24
16
25
29
51
2006-07: Services: 55.1%, Industry: 26.4%, Agriculture: 18.5% of GDP 30.5 per cent in 1950-51 to 55.2 per cent in 2009-10. If construction is also included, then the share increases to 63.4 per cent in 2009-10.
Employment
3 5 5
33 32 21
64 63 74
54 55 54
50 62 34
India
51
22
Manufacturing
manufacturing output went up considerably, from about 1% (1980) to about 25% (in 1990s).
International Trade
U.K
Australia Japan China India
32.4
22.4 13.9 9.6 (it is net importer of services) 30.9
WORLD
18.6
India's total merchandize export in world 31st rank Indias service export 20th rank
5%
5% 6%
Com m unication Services
11% 49%
Construction Services Insurance Services Financial Services Com puter and Inform ation services
8%
Royalties and License fees Personal, Cultural and Recreational Services Other business services
13% 3%
CAGR of the Indian economy from 5.7% (1990s) to 8.6% during the period 2004-05 to 2009-10 was to a large measure due to the acceleration of CAGR in the services sector from 7.5% (1990s) to 10.3% in 2004-05 to 2009-10. The services sector growth was significantly faster than the 6.6 per cent for the combined agriculture and industry sectors annual output growth during the same period. In 2009-10, services growth was 10.1 per cent and in 2010-11
Openness has been associated with higher growth World Bank, 2004
Urbanization
Regulatory Policies
External demand
Increase in life expectancy Innovation