Paper Example on The Agrarian & Industrial Revolutions: Tracing Human Economic History

Introduction

The agrarian revolution was a move that shifted the economic human activities from hunting and gathering to structured agriculture and pastoralism. The industrial revolution, on the other hand, was a movement that saw the shift of human economic activities from the typical agrarian lifestyle to the incorporation of industrialization, urbanization, and mechanization. These two are among the various transformations that have been historically explored as crucial points of reference to the modern economy. However, one sleeping giant has been left unrecognized, and this is the service industry. The service economy is an economic revolution similar to those mentioned above but holds an even critical niche as it ensures a smooth economic transaction. Service products are those that exclude primary and manufacturing processes (Kon 43). It is therefore fundamental to take a keen look at the service economy, its history and development, the factors that facilitated its growth, and the economic significance in holds, particularly in the United States.

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History of the Service Industry

Developing countries more so in Europe and America have been experiencing a consistent shift in the economy from a primary and manufacturing one to a service economy. In the United States, for instance, the service economy was dominating a third of its gross domestic product (GDP) in early 1900, and by 1978, it contributed to two-thirds of its GDP (Encyclopedia Britannica). Towards the 21st century, three-quarters of its economy was defined by the service industry. Countries of Europe also witnessed a growth in a tendency towards the service industry, particularly after the oil crises of 1973 that rendered most of manufacturing problematic (Kon 44). This trend, therefore, created a window where manufacturing and primary production could not be exclusively considered as basic activities while service provision was considered a residual one. Various factors and reasons precipitated the rise of the service industry.

Factors That Led To the Development of the Service Industry

Mechanization

It was becoming subtle day after the other that primary production and manufacturing was no longer the secure venture that many individuals thought they were. The industrial revolution dragged with it a massive application of mechanization. A single machine could accomplish a task previously done by dozens of individuals, and this thus gradually eliminated the human factor in the production process. Mechanization ensured uniformity, efficiency, consistency, and accuracy in production, and therefore, many people started to venture in the assembling of these goods, distributing them, and marketing and advertising them (Encyclopedia Britannica). The management of the production, sales, and finances thus became the next stages that required the involvement of human labor. This was a significant shift as many people were now involved in the provision of services attached to the goods produced through mechanization.

Government Employments

Another factor that contributed to the growth of the service industry was the increase in employment opportunities by the governments. The great depression had left a significant gap in the employment sector, and this thus necessitated the government to create employment opportunities for the citizens. A majority of these opportunities required the rendering of services rather than the production of goods, and this promptly resulted in the growth of the service industry.

Globalization

Globalization opened up the world for trade and other transactions. It also created a pool of resources that could be transported, insured, stored, assembled, or sold. The various service sectors were thus bound to develop. The financial industry in India was notably expanded by globalization. Technological advancements spearheaded by globalization, market shifts, and competition created a transitioning for the financial institutions as they had to incorporate information technology for automation of costs among other transitioning moves for this service industry (Selvaraj). Movement of capital and financial flows were highly advantaged by globalization.

Impact of the Service Economy

The service industries have had tremendous effects on the economies of the countries they operate within. The world's developed countries realized 74% of their GDP from the service industries in 2015, an increase from the 69% GDP contribution in 1997 (Buckley and Mujamdar). In the United States, the range was from 74.4% in 1997 to 78.9% in 2017. This amount to $13.1 trillion (Buckley and Mujamdar). These values are in terms of the value-added to the GDP by the service industries. The service industry has also provided a significant number of employment opportunities due to its output. For the members of the OECD, among them the united states, the service sector is presumed to be the biggest employer, accruing 70% of the employed labor force in 2017 (Buckley and Mujamdar). In America, 124 million employees constituting 86.3% of the private sector employees are in the service industry. Trade in services is on the rise globally, a trend that has even surpassed the growth in trade in manufactured goods. The world is drastically warming up to the service industry, and with the increase in mechanization, many people have ventured in businesses such as insurance and thus increased the trade in their services. The increase in technological advancement creates a future that has the service industry expanding and adapting to the various conformities set by the world.

Conclusion

The intangibility and un-tradability of services have often created an impression that services barely create an economy worth exploring. However, the service industry has been a growing economy due to the mechanization of the industrial economy, globalization, and an increase in government employment. The economic significance of this growth has been substantial growth in GDP in the various states and nations that these industries thrive within, rise in employment opportunities as well as an increase in service trade within and across the borders. Technology hints an optimistic future for this industry.

Works Cited

Buckley P. and Mujamdar R. "The services powerhouse: Increasingly vital to world economic growth." Delloite. 2018. https://www2.deloitte.com/us/en/insights/economy/issues-by-the-numbers/trade-in-services-economy-growth.html

Encyclopedia Britannica. "Service sector." 2018. https://www.britannica.com/topic/service-industry

Kon A. Service industries and service economy. Pp. 43-50. 1997. https://www.researchgate.net/publication/23646193_Service_Industries_and_Service_Economy

Selvaraj S. N. Impact of globalization on financial service sector. 2011. https://www.researchgate.net/publication/314063764_IMPACT_OF_GLOBALIZATION_ON_FINANCIAL_SERVICE_SECTOR. Accessed on august 27, 2019.