Industries have historically thrived by producing tangible goods that fulfill basic human needs such as food, shelter, and clothing. As these needs were met, there arose a demand for enhanced satisfaction, leading to the proliferation of product variations and numerous manufacturing companies. The growth of service industries, on the other hand, can be attributed to the economic development of society and the accompanying socio-cultural changes. Various environmental forces have played a role in bringing different types of services to the forefront of the economy.
Several environmental factors contribute to the emergence of new services:
(i) Consumer Affluence:
Rapid increases in consumer income have drawn individuals towards diverse areas like clubs, health services, travel, entertainment, banking, and insurance. These sectors are experiencing significant growth due to changing patterns in family expenditures.
(ii) Working women:
The increasing participation of women in various professions, including banking, insurance, and airlines, has led to the creation of services catering to their needs. Activities such as domestic services, fast food restaurants, marriage counseling, and personal care have emerged in response to the rising involvement of women in traditionally male-dominated fields.
(iii) Double Income No Kids (DINK):
Couples consciously delaying or deciding against parenthood, known as DINKs, are contributing to the growth of services. With double incomes and no children, this demographic is driving demand for entertainment, hotels, career institutes, domestic services, and personal care.
(iv) Leisure Time:
People’s availability of leisure time has given rise to services such as travel agencies, resorts, hotels, and entertainment. Additionally, there is a demand for adult education, distance learning, and part-time courses as individuals seek to utilize their free time to improve their career prospects.
(v) Greater Life Expectancy:
The increased life expectancy of people globally has opened up opportunities in services such as hospitals, nursing homes, entertainment, leisure services, and investment banking.
(vi) Product Innovations:
Consumers’ emphasis on quality over cost has driven manufacturers to focus on product innovation, leading to the emergence of services related to servicing, repairs, computer services, training, and development.
(vii) Product Complexity:
The complexity of certain products, like water purifiers and computers, has resulted in a demand for specialized services. Skilled specialists are needed for maintenance, creating opportunities for expert advice and consulting services.
(viii) Complexity of Life:
The increasing complexity of life due to socio-economic, psycho-political, technological, and legal changes has given rise to services such as legal aid, tax consulting, professional services, airlines, courier services, insurance, and banking.
(ix) New Young Youth:
Each new generation brings its own characteristics and lifestyle, providing opportunities for services such as entertainment, fast food, computers, travel, educational institutions, counseling, and retailing.
(x) Resource scarcity and ecology:
The depletion of natural resources and the need for conservation have led to the emergence of services such as pollution control agencies, carpools, and water management.
(xi) Corporate Crowd:
Globalization, privatization, and liberalization, coupled with urbanization, have given rise to the corporate world and its support services. This has led to the emergence and growth of services such as hotels and restaurants, banking, insurance, travel and tourism, advertising, airlines, courier services, marketing research, health care, and legal services.