A service economy refers to an economic system where the majority of economic activity is focused on providing services rather than producing goods. This shift is characterized by a decline in manufacturing and an increase in industries such as healthcare, education, finance, and entertainment.
Related terms
Deindustrialization: Deindustrialization refers to the decline or reduction of industrial activities within an economy. It often accompanies the shift towards a service-based economy.
Outsourcing: Outsourcing is when a company hires another company or individual outside their own organization to perform certain tasks or provide specific services. This practice became more common during the transition to a service economy.
Information Technology (IT): Information Technology encompasses technologies used for storing, retrieving, transmitting, and manipulating data. It played a crucial role in facilitating the growth of the service sector as computers and digital systems became integral to many service-oriented businesses.