The tertiary sector is also called the service sector. Activities

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The tertiary sector is also called the service sector.


  • The selling of goods and products from primary and secondary industries

  • The sale of services and skills.

  • The transport of goods and products

  • Tourism

Tertiary employment: health service, transportation, education, entertainment, tourism, finance, sales and retail, plumbers and mechanics.

The biggest area of expansion in the tertiary sector: financial and business services. According to government statistics, 25 years ago one in ten people worked in this sector; now this is one in five.

TERTIARY LOCATION FACTORS include easy access to:

  • power supply

  • communications including transport, telecommunications

  • labour supply including skilled workers

  • distance to market

  • subsidies and financial incentives from governments

  • raw materials

    1. TRADE:

Definition: It is the exchange of goods and services across local, national or international boundaries or territories.

Representation: In most countries, it represents a significant share of GDP.

Types: Commerce (in history: protectionism, free trade), outsourcing, multinational corporations, and globalization are all having a major impact.

What is globalization?

Globalization: the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. It is the result of

  1. technological changes that enable people, goods, money and above all information and ideas to travel the world much faster than ever before, and

  2. the liberalisation of world markets, greatly increasing levels of trade between different parts of the world

Globalisation: not new phenomenon but predominant over the last half-century. Factors influencing globalization:

Communications: TV, telephony and the internet have created a global village. Spanish businesses can have a call centre in Argentina answering calls from Spanish customers.

Transport has become cheap and quick. People now holiday all over the world, and people from other countries can travel to others to seek better-paid jobs. Businesses can more easily manufactured products and raw materials all over the world - making products and services from all over the globe available to any customer.

Trade liberalisation: governments around the world have relaxed laws restricting trade and foreign investment, with some governments offering subsidies and tax incentives to persuade foreign companies to invest in their country. The idea that there should be no restrictions on trade between countries is known as free trade.

Although globalisation probably is helping to create more wealth in developing countries - it is not helping to close the gap between the world's poorest countries and the world's richest.

Positive impacts of globalization:

  • Investments by multinational corporations (MNCs): they help countries by provide new jobs and skills for local people.

  • MNCs bring wealth / foreign currency to local economies when they buy local resources, products and services - providing resources for education, health and infrastructure.

  • There is far more mixing of people and cultures from all over the world: sharing of ideas, experiences, and lifestyles. People can experience foods and other products not previously available in their countries.

  • Globalisation can help make people aware of events in far-away parts of the world. For example, people all over the world were quickly aware of the impact of the 2004 Tsunami tidal wave on countries in SE Asia, and were therefore able to send help rapidly.

  • It may help make people more aware of global issues such as deforestation and global warming - and alert them to the need for sustainable development.

Negative impacts of globalisation:

Critics include many different groups such as environmentalists, anti-poverty campaigners and trade-unionists.

Some of the negative impacts are:

  • Globalisation operates mostly in the interests of the richest countries (they dominate world trade), and at the expense of developing countries -(they provide the MEDC's with cheap labour and raw materials).

  • There are no guarantees that the wealth from MNC's investment will benefit the local community (profits are sent back to the MEDC where the MNC is based). Multinational companies, with their massive economies of scale, may drive local companies out of business. If it becomes cheaper to operate in another country the MNC might close down the factory and make local people redundant.

  • Lack of strictly enforced international laws means that MNCs may operate in a way that would not be allowed in an MEDC (polluting the environment, running risks with safety or imposing poor working conditions and low wages on local workers).

  • Globalization is viewed by many as a threat to the world's cultural diversity - drowning out local economies, traditions and languages and re-casting the whole world in the mould of the capitalist North and West.

Anti-globalization campaigners: carry out demonstrations against the World Trade Organisation (WTO), an inter-government organisation which promotes the free-flow of trade around the world.


  • Write a 50 words paragraph making sure you understand that globalisation refers to changing relationships between different world cultures, as well as different world economies - and that there are differing views about the benefits and drawbacks of globalisation.

A Common Market is a customs union with common policies on product regulation, and freedom of movement of all the three factors of production (land, capital and labour) and of enterprise. The goal is that movement of capital, labour, goods, and services between the members is as easy as within them.

This is the fourth stage of economic integration (e.g. the European Union).

It includes:

  • removing the physical (borders), technical (standards) and fiscal (taxes) barriers among the member states.

  • To remove these barriers the member states need political will and they have to formulate common economic policies (e.g. CAP in the EU).


Definition: Movements of people, goods and information from one place to another.


  • high levels of accessibility (Although this trend can be traced back to the industrial revolution, it significantly accelerated in the second half of the 20th century as trade was liberalized)

  • efficient use of resources

  • transport systems: to support commuting, supplying energy needs, to distributing parts between factories.

  • Contributes to global economy

  • importance of specific dimensions such as nodes, locations, networks and interactions.


Modes of transport are combinations of networks, vehicles, and operations, and include walking, the road transport system, rail transport, ship transport and modern aviation.

Private transport

Public transport: all transport systems in which the passengers do not travel in their own vehicles. They include: rail and bus services, airline services, ferries, taxicab services etc. — any system that transports members of the general public.

  • Short distance: underground, buses .

  • Long-distance or commuter railroads, inter-city buses, or intercity railways.

Sustainable transport: sustainable transport is used to describe all forms of transport which minimise emissions of carbon dioxide and pollutants. It can refer to public transport, car sharing, walking and cycling as well as technology such as electric and hybrid cars and biodiesel. In particular the phrase has been adopted by environmental campaign groups.

    1. TOURISM: (see textbook)


  • activities providing information services, such as computing and ICT (information and communication technologies), consultancy (offering advice to businesses) and R&D (research, particular in scientific fields).

The quaternary sector is sometimes included with the tertiary sector, as they are both service sectors. Between them, the tertiary and quaternary sectors are the largest part of the EU economy, employing 76% of the workforce.


Any large-scale economic activity may have a negative impact on the natural environment, for example manufacturing industries can cause air, water and noise pollution. Industrial pollution can intervene in the environment in a number of ways:

  • it may damage the wellbeing of humans and other species - for example by polluting drinking-water supplies or poisoning plants or animals

  • it may interfere with natural processes - for example, changing local climatic conditions or destroying wildlife habitats, and

  • it may impact on people's livelihoods - for example, pollution of the sea will hurt people who are involved in fishing and tourism.

Industrial atmospheric pollution in Tashkent, Uzbekistan

Some governments have introduced legislation to try to cut down on avoidable pollution and to encourage industries which are non-polluting and therefore more sustainable. These laws must of course be enforced by courts.

The Exxon oil spill1

A recent example of courts taking action against a company causing pollution was in 2004 when a US court ordered the oil company Exxon to pay £2.5bn for an oil spill 15 years ago, in 1989. The court wanted the money to help compensate those people in Alaska, whose livelihoods were hurt the worst. This is the latest ruling in a long-running court case.

The oil tanker Exxon Valdez ran aground while off course. It spilled 11 million gallons of crude oil contaminating over 1,300 miles of the coast of Alaska. It is estimated that the spill killed as many as 250,000 seabirds, 3,000 sea otters, 300 seals and 22 killer whales.


  • Use case-study examples, perhaps from the news, to show how economic activity can have different impacts on the environment. If possible tie case studies into different areas of geography (50 words).

1 Derelicts of the Swedish Chemics Boliden in Aznalcóllar (Sevilla) to National Park of Doñana (2002).

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