1. Service industry and the Global economy
Service industry and the Global economyThe service industry is very important in the
development of a global economy. Services play a vital role in inter-regional development
through enhancement of trade and other activities, which improve the ground on which
business is conducted. The service industry can be said to anchor other industries. Services
such as utilities and energy are essential services that the product industry cannot function
without. The services industry in the modern world has grown tremendously, and has led to
globalization of businesses. It can therefore be argued that the globalization phenomenon
has been brought about largely by enhancing the service industry. This means that the
service industry is an industry that cannot to be ignored (Rust & Huang 2012).The product
industry is supported largely by the service industry. This means that enriching the service
industry will also enhance the product industry, which will in turn enhance trade. OECD
countries are good examples of countries that have realized high growth as a result of
enhancing their service sector (McManus 2009). These countries have invested heavily on
the industry in order to achieve great heights in development. OECD member countries
such as France, Japan, United States, Germany and the UK have attained high growth as a
result of increasingly enhancing the service industry. This is evidence that service industry
is just as important as the product industry (Rust & Huang 2012).There are underlying
reasons why the service industry should be developed. It is however important to note the
areas that the service industry encompasses. The need for a service is triggered by the state
of the environment. The environment might miss some important aspect. The need to fill
the gap with the missing need gives rise to provision of various services. State of the
artifacts provided by the secondary sector is also a factor that gives rise to a need for
services (Albalate 2012). This is where services such as transport, repair and maintenance
as well as building services are provided.The state of people is also an area that gives rise to
need for services. This is whereby services such as healthcare may arise. People will always
fall sick and the need for medical services arises. Medical services enhance health of
individuals. Healthy people are able to work, thus able to produce other goods and services.
To enhance health service provision, education is required (Riedl 2010), to train doctors
and other healthcare providers. Also expertise in the product industry is gained through
specialized training, thus the need to train and improve the quality of their output. This
means that the service industry is essentially at the core of growth of any economy (O’ Hara
2012).The modern world is based on information. This means that people must be provided
with adequate information concerning the general issues that are occurring in the world.
2. The need to harmonize the world gives rise to a need for information. Information is
required in order to transmit a particular innovation to the rest of the world easily.
Information is required to do almost everything from training, enhancing operations of a
business, politics and to all activities that take place in the world. Information is the key
component of the service industry (Riedl 2010). It helps to faster spread inventions,
facilitating faster development of global economies (Rust & Huang 2012).To achieve high
and increasing growth, there must be high levels of entrepreneurship. Information
Technology is one of the areas of the service industry that is experiencing tremendous
changes. This area has a high potential for innovations. Entrepreneurs have used
information technology to enhance the operations of their businesses. They are able to track
the activities and inventions from across the globe, and enhance their businesses. Such
activities are able to enhance businesses around the world, thereby creating global
economies through interdependence (Claudia 2008).Communication is also another sector
in service industry which has great impacts on global economies. It has brought people
together by enabling interactions between individuals from both local and international
geographical regions. There have been constant innovations of innovations in
communication industry. The largest one being communication through social networks.
Social media networks have helped individuals from all regions of the world to connect
together. Since communication is one of the aids to trade, global economy is improved.
There have also been innovations in televisions. There are global channels such as DSTV
which is able to reach all parts of the world. Businesses are using such media channels to
reach global market hence correcting their countries’ balance of payments (Claudia
2008).Organizations and individuals have extensively using social media such as Facebook
and Twitter to reach a large number of global customers. They have opened their page
where all visitors of the sites can retrieve their information. This has enabled companies to
operate on global scale irrespective of their size. Social media have helped many small
businesses to achieve high growth since making Ads through these sites is cheap, unlike
using television which can only be afforded by large companies since the advertising costs
are large. Businesses also use international television channels to promote the services they
offer (O’ Hara 2012). Through the channels, they can be able to reach a wide range of
customers from the global market.Websites are also commonly used by organizations to
reach large number of global customers. Advertising on the web is also cheaper compared
to other channels of advertising. Companies make information available to all visitors of the
website and hence they reach clients from all over the world. Companies have also opened
their websites where individuals can get all the information they need. This makes it easier
for the company to reach the global market without incurring heavy costs. There are also
websites where individuals can access services online (O’ Hara 2012).Policy making has
contributed to increased global economies. Through the desire for integration, countries
have reviewed their policies in order to fit in the modern global world. They have reduced
barriers to trade and formed trading blocks, with few restrictions. This has enhanced
services provision through high mobility of expertise in different countries hence increasing
production through enhanced production methods. Financial services have also been
enhanced to enable flow of capital from one country to another. People and corporates in
3. different parts of the world are able to trade together. Research has shown that if financial
services were restricted, business opportunities would reduce, thereby reducing global
economic growth (Albalate 2012).Barclays is a financial services provider. This is a banking
institution found all over the world. The bank has attained high growth and expansion as a
result of offering services and laying down strategies that have led to the bank’ s success.
Barclays Bank is one of the largest banks in the world. The bank can be said to be a global
bank since it offers its financial services to many countries of the world. The bank has
played a major role in developing global economies (Albalate 2012). It has managed this by
employing best practices that lead to success of service businesses. The bank has made use
of information technology, a major opportunity of businesses in service industry.
Technology has helped the bank to offer quality services and has helped to monitor
operations of various services of the bank. It has also aided communication in all branches
of the bank. This makes innovations to be adopted fast in all the branches. The bank has
achieved growth through its continuous innovation in financial sector and through research
and development. Innovations in the bank have been able to retain existing customers and
attracting more into the business hence achieving high growth (Johnson 2012).Standard
chartered is also an international financial institution that offers banking services. The bank
is also among the most recognized banking brands in the world. It has achieved its success
through offering quality services and creating value to its customers. The bank has also
embraced information technology which has enabled it to operate profitably on a global
scale. It has also invested in innovations (Johnson 2012). The bank has constantly made
innovations that have increased efficiency in service delivery of the bank.There are
similarities between operations of the two banking institutions. Both target the global
market. Their global distribution means that they target customers in diverse geographical
regions. They have also embraced technology which has helped the institutions to increase
their growth through enhanced communication throughout all their branches worldwide
(Antony 2004).Although the banks are similar in terms of their services, there are some
differences that can be noted. One of the differences between the two institutions in terms
of service provision is their target market. Standard chartered has targeted the affluent
members of the society while Barclays has been more general in their target market.
Barclays has built its service industry by improving its services and widening the scope of
its target market (Antony 2004).In conclusion, not only has the service industry played an
important role in the global economy to date, but it continues to be an important and
integral part of activities aimed at economic growth. The paper highlights various ways in
which not only does the sector contribute towards the economy, but ways in which the
product industry also depends on it.It is the writer’ s opinion that the service industry is
not only as important as the product industry, but it is perhaps more important. This is
more so considering how the service industry plays an important role in shaping the
product industry and the global economy. It is no coincidence that OECD countries that have
focused on the service industry have realized rapid growth, a clear pointer of its economic
importance.ReferencesAlbalate, D 2012, ‘ Social Preferences and Policy Centralization: The
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‘ Examining the role of service climate in health care: An empirical study of emergency
departments’ , International Journal of Service Industry Management, Vol. 19 no 2, pp.188
– 209.Johnson, J 2012, ‘ Book Review: Centeno. M. A. and Cohen. J. N. (2010), Global
Capitalism: A Sociological Perspective’ , Journal of Economic and Social Policy: Vol. 15: no 1,
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