Geography of Service Industries

by

Peter Daniels

• LAST REVIEWED: 27 June 2017
• LAST MODIFIED: 27 June 2017
• DOI: 10.1093/obo/9780199874002-0046

Introduction

There are very few business activities, government departments, households, or individual persons that are not engaged daily in the consumption and/or production of one or more services. Infrastructure used for the journey to work, for the storage and movement of freight, for travel to destinations worldwide, for online retailing, or for social interaction is service enabling. Support services are required when an office photocopier or a domestic central heating boiler breaks down, when an automobile requires a repair, or when a business wants to hire staff. Some services are used to solve a problem; others are used at a person’s discretion—whether it be to eat at a restaurant, to seek investment advice from a broker, or to use a hair stylist. Other services are bundled with a good, such as the installation of a new carpet or a kitchen, or a maintenance contract for a company computer server. Finally, universal services are usually free at the point of use, such as a secondary school education, a consultation with a doctor, treatment at a hospital, or some benefits provided by the state. These examples are far from exhaustive, but they serve to demonstrate the diversity of services, a characteristic regularly boosted by advances in technology, changes in the way that businesses function or are organized, ongoing structural changes to national economies and societies, and further specialization in the nature of work and of occupations. Services have been integral to the functioning of economies and societies for at least two hundred years. Yet most of the early studies were preoccupied with agriculture, manufacturing, or the extraction industries, underpinned by the idea that the existence of services was dependent upon these other major categories of economic activity. For a long time services were little more than a footnote in most studies of the economy, even in the leading works by economists. Awareness slowly increased by the middle of the 20th century as shifts in economic structure toward services and the uneven geography of the production of certain kinds of services began to attract more attention. This included some geographers who started to examine more closely the causes of the so-called rise of services, and particularly the causes and consequences of variations in the way in which different types of services were distributed; within and between cities, among regions within countries, and, as the 21st century approached, among countries and regions across the globe.

General Overviews

Studies of the geography of services that embraced the diversity of the activities involved did not emerge until the 1960s. Landmark studies by economists that highlighted the emergence of services, such as Stigler 1956 and Fuchs 1965, did not really explore the geographical outcomes. While some geographers, notably in works such as Walker 1985, maintained a skepticism about the distinctiveness of services from manufacturing in production, it was the earlier seminal work of Christaller 1966 that developed a geographical theory for explaining the size and location of villages and towns predicated on the assumption that their principal function was to provide services to the areas surrounding them, which sparked attention to services by geographers. Several studies were published during the 1960s, including Berry 1967, that used Christaller’s central place theory to explain the relationship between the characteristics of retail services and settlement patterns. Such activity-specific geographical studies of services were later broadened to cover services in all their diversity. The driver in many cases was concern about the way in which services had been overlooked by geographers; Daniels 1985 initially attempted to address this gap by synthesizing the available geographical and other literature. Later, Daniels 1993 also highlighted the connections between phenomena such as the globalization of cities or trade flows and the rise of services. Another valuable research synthesis is provided in Illeris 1996, which stresses the importance of understanding the geographies of services with reference to ideas about a new service society or a new service economy of the kind discussed in Stanback, et al. 1981.

• Berry, Brian J. L. Geography of Market Centers and Retail Distribution. Englewood Cliffs, NJ: Prentice Hall, 1967.

  A short but seminal text that showed for the first time in a systematic way how variations in population density could be related to variations in the size and spacing of retail service centers across geographical space.

• Christaller, Walter. Central Places in Southern Germany. Translated by Carlisle W. Baksin. Englewood Cliffs, NJ: Prentice Hall, 1966.

  A translation of Die zentralen Orte in Süddeutschland, published in 1933. Christaller’s theory helps to explains why some services are present in almost all settlements, from the smallest to the largest, while other services are located only in some, often larger, settlements. The theory dispels the idea that services like retailing only perform a nonbasic role in city or regional economies.

• Daniels, P. W. Service Industries: A Geographical Appraisal. London: Methuen, 1985.

  Provides an overview of studies of service activities, mostly by geographers, and attempts to demonstrate in a structured and systematic way the diverse and increasingly pervasive role of service industries in economic development and in the spatial structure of cities and regions.

• Daniels, P. W. Service Industries in the World Economy. IBG Studies in Geography. Oxford: Blackwell, 1993.

  Explores the processes underpinning the way in which services industries that, historically, have thrived, largely in national markets have extended their reach and direct presence in international markets. Daniels shows how these trends are accompanied by a distinctive global geography of services trade flows and investment in which large cities are key players.

• Fuchs, Victor R. The Growing Importance of the Service Industries. NBER Occasional Paper 96. New York: National Bureau of Economic Research, 1965.

  A landmark study. The United States was the first nation not to have more than 50 percent of those in employment producing automobiles, food, housing, and so on—in other words, in the production of tangibles. Fuchs explores the reasons for the relative growth of the service sector, its significance for the US economy, and the implications for economic analysis.

• Illeris, Sven. The Service Economy: A Geographical Approach. Chichester, UK: Wiley, 1996.

  An excellent synthesis of the many studies undertaken between the mid-1980s and the mid-1990s that deepened geographical knowledge about the services economy, especially across Europe, combined with some original insights on the numerous questions about services that needed to be better understood.

• Stanback, Thomas M., Peter J. Bearse, Thierry J. Noyelle, and Robert A. Karasek. Services: The New Economy. Conservation of Human Resources Series 20. Totowa, NJ: Allanheld, Osmun, 1981.

  A good overview of the changing structure of the service industries in the United States, which gave rise to the idea that they comprised a new, different economy, even though services were a well-established and thriving part of the US economy well before this occurred in most other countries.

• Stigler, George J. Trends in Employment in the Service Industries. Princeton, NJ: Princeton University Press, 1956.

  Because of the diverse nature of service industries, analyses of employment and output were made by undertaking studies in detail of some specific industries, such as business services and professional services. Stigler notes, however, that such surveys lacked depth because of poor data, a familiar constraint that was aired at the start of many later studies of the service sector.

• Walker, Richard A. “Is There a Service Economy? The Changing Capitalist Division of Labour.” Science & Society 49.1 (1985): 42–43.

  Argues that most services are just classic activities of a goods-producing economy, extending, deepening, and perfecting the capitalist industrial system. Contends that the notion of a distinctive service economy is therefore a misnomer. The growth of service activities depends on the power of the industrial system.