Service Industries: Origin and Types

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  • 0:03 Service Industry
  • 1:33 Consumer Services
  • 3:13 Business Services
  • 4:52 Public Services
  • 6:12 Lesson Summary
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Lesson Transcript
Jessica Whittemore

Jessica has taught junior high history and college seminar courses. She has a master's degree in education.

Expert Contributor
Steven Scalia

Steven completed a Graduate Degree is Chartered Accountancy at Concordia University. He has performed as Teacher's Assistant and Assistant Lecturer in University.

This lesson will seek to define the concept of the service industry. In doing so, it will focus on consumer, business, and public services while also defining division of labor, automation, and urbanization.

Service Industry

Every five weeks, like clockwork, my husband walks into our local salon and gets his haircut. And every five weeks, like clockwork, he hands his stylist $24 dollars. However, when he walks out, he isn't carrying any products to show for his $24. On the contrary, it could be argued that he's paying her to take something away from him.

Obviously, we all know how haircuts work and the idea that she is taking something from him is a bit ludicrous. However, the fact that he really leaves with nothing, with no tangible products being bought or sold, is a great example of what we call the service industry, the topic of today's lesson.

For starters, a service industry is generally defined as a business that does work for a customer but is not involved in manufacturing. Putting this definition into example, a contractor is part of the service industry. Yes, he may come to your house and use wood to frame out a new room but he did not manufacture the wood, nails, or drywall. He's just providing the service of crafting these materials into a finished room.

When speaking of the service industry, it is usually broken down into three categories. They are consumer services, business services, and public services. For the remainder of today's lesson, we'll take a closer look at these three.

Consumer Services

We'll kick it off with consumer services. Again speaking rather generally, consumer services are the variety of services provided to consumers of a product by the field that creates, markets, or provides the product. A great example of this is the automotive industry. For instance, first we purchase a car from a dealership, then many of us routinely take the car back to the dealership for scheduled maintenance. No, we aren't buying a new car every time; instead, we're paying for help to maintain the vehicle we've already bought. Another great example of a consumer service occurs every time we spend hours on the phone waiting for technical support to help us resurrect our dead Internet signal.

Being very linked to the modern era, consumer services began to boom when division of labor became commonplace. Being the assigning of different parts of a manufacturing procedure or tasks to different people in order to improve efficiency and productivity, the division of labor limited the breadth of people's knowledge, which in turn caused the need for services.

For instance, an early 19th century subsistence farmer usually built his own house, dug his own well, and maybe even fashioned his own wagon wheels. Therefore, when one of these things began to act up, he knew how to fix the problem. However, this is not the case today as most people are only knowledgeable in certain fields. For instance, my dad was a businessman. If you needed to know what to invest in, he was your guy. However, when our cars broke down, he was definitely not the guy, so off our vehicles went to the local mechanic, a provider of a consumer service.

Business Services

Moving on, and leaving my poor dad alone, we now come to business services. A business service again is a general term that describes work that offers support to a business but does not produce a tangible product. It supports the actual manufacturing of tangible products. For this one, I'll use my husband.

Being part of the technical field of aerospace, one of my husband's jobs is to go into manufacturing facilities and reconfigure their manufacturing process in order to make it more efficient. No, he never built an actual helicopter or an airplane but he did help the manufacturers of these airborne transporters get them in the air much faster and a bit cheaper.

Another great example of business services is found in the IT industry with the information technologists who are called in to solve computer issues that occur in the manufacturing process. Speaking of IT issues, many would assert that business services began to thrive as the automation of industry took hold. Stated very simply, automation is the usage of mostly automatic equipment in a system of manufacturing or production. As automation took hold, the people running the machines became more and more detached from how to actually fix the machines, thus the need for business services grew.

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Additional Activities

Service Industries - An Essay Prompt:

The following Essay Prompt is designed to enable students to apply their knowledge of service industries to everyday examples found in our modern world.


We encounter companies and organizations in the service industries every day. There are also many instances in which we benefit from service industries without being aware of it. For instance, the military provides national defense services to the citizens of a country 24 hours a day, 7 days a week. Every time we turn on a light switch, take a warm bath, or make a phone call, we are benefiting from services. The point is that service industries are everywhere in our day to day life.

Essay Prompt

Let's think back of the past week. By going through the various activities you did in the last 7 days, identify at least five services that you made use of, either directly or indirectly (You can't use the ones mentioned above). For each of these services, describe the nature of the service. Next, categorize each of these services into the categories presented in your Lesson (i.e., Consumer, Business, or Public services) and explain your rationale. This essay must be a minimum of 100 words.

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