Most of us, professionally or otherwise, provide some sort of service and at the same time also consume it, but have we given a thought to what Service is? Let’s try to scratch the surface a little bit and explore its contribution as a sector and its importance.
Service can mean a lot of different things to different people. For lawyers, service is the formal delivery of legal documents such as a summons. For homeowners, it can be a utility such as gas, electricity, or water. For car owners, it is the annual maintenance of their vehicle. For caregivers, it may be in the form of taking care of their patients.
What is a Service?
“A service is an act of performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product". - Philip Kotler
With computers, a service is software that performs automated tasks, responds to hardware events, or listens for data requests from other software.
The three industries within the services division that experienced the most growth in the last decade have been business services, health care, and social services. The business services areas in which the largest number of jobs was created were personnel supply and computer services. The computer services industry includes mass-produced software, custom programming, custom computer systems design, and computer leasing. The primary reason for the growth in both of these areas has been changed in business processes.
Another important type of service is community services. Though the service providers don’t get paid for their service, it helps toward the betterment of the community as a whole. Community service develops an increased sense of social responsibility – a global view of society and a heart for ‘giving back’ and helping others.
Take an example of Open Source Software. Open Source Software embraces and celebrates the principles of open exchange, collaborative participation, rapid prototyping, transparency, meritocracy, and community-driven development.
Contribution of Service Sector in Economy Growth
The service sector is the lifeline of the socio-economic growth of a country. Today it is the largest and fastest-growing sector contributing more to the global output and employing more people than any other sector. In alignment with the global trends, the Indian Services sector has witnessed a major boom and is one of the major contributors to both employment and national income in recent times.
Driving Forces of Service Sector Growth in India
India has the fastest growing service sector in the world, contributes about 66% to the Indian GDP and is mostly driven by -
- A Large pool of STEM talent.
- Cost advantage.
- Expertise in technology-enabled business transformation.
- Vibrant start-up ecosystem.
India is the export hub for IT and ITeS. The Indian IT outsourcing services are expected to witness 6 - 8% growth between 2021 to 2024. This is mostly due to the large pool of skilled manpower especially in the areas of IT and ITeS is available at a relatively lower cost. Indian IT firms have world-class global delivery centers across the world and are well diversified across verticals such as BFSI, Healthcare, Retail, Telecom etc.
India’s distinctive competencies and competitive advantage formed by the knowledge-based services make it a unique emerging market globally. The services sector in India has the potential to unlock a multi-trillion-dollar opportunity that can create mutual growth for all nations.