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World Geography
5.7 The Economic Importance of
Tertiary and Quaternary Industry
5.7.1/3 Describe the economic importance
of the tertiary and quaternary sectors (k)
(1) Diversifies the economy- allows for more individuals to move out of the
primary and secondary sectors which is beneficial to a countries economy
This allows for people in developing countries to learn skills that will benefit the
economy and move the country forward
(2) Contributes to countries GDP- these sectors produce over 70% of the
GDP in many countries.
(3) Improved standards of living- this is especially true for the tertiary
industry of tourism in less developed countries because their economies are
so dependent on the tourist trade
(4) Growth simulates more growth- as the country benefits from the increase
growth of the tertiary and quaternary industries, the growth feeds off itself.
By this we mean that as the economy grows and the standard of living
improves
5.7.2 Analyze issues that affect the
viability of a tertiary activity. (a)
The tertiary industry is a growing sector
It has seen constant growth over the past 100 years
The multiplier effect is in part responsible for this phenomenon
As the secondary sector of the economy grew, there were
more people working in urban areas as manufacturers.
The concentration of people meant there was more need for
services. Service industries grow in turn.
The people working in the tertiary industry need services too so the
growth of the service industry continues.
5.7.2 Analyze issues that affect the
viability of a tertiary activity. (a)
1) Population size/location
a. The population needs to be large enough to
support service industry, and must be
located where they can access the services
2) Type of service and price
a. There must be a demand for the service. It
must be affordable
3) Quality
a. The quality of the service provided must
attract customers.
5.7.3 Describe the economic importance of
the quaternary sector. (k)
The quaternary sector of the economy is important for many reasons
It is the area of the economy that allows for companies to research cost cutting
methods, new markets, innovation, and new methods of production
In the quaternary sector companies can use investments to plan for future
expansion, or to gain higher returns on investment
The quaternary sector is most valuable because it allows companies to create
new products from which they can make a profit
Mach3
Fusion
5.7.4 Examine factors that affect the
growth of the quaternary sector. (a)
• Increased demand: As tertiary industries grow there is
an increased demand for innovation, and investment
• Development of communication Technology: Over the
past 20 years there have been major imporvements in
the ability of developing countries to communicate.
This allows the outsourcing of jobs to new markets
• Increased education: More people are seeking higher
education and are now able to fill roles in the
information/research and development positions.
5.7.5 Evaluate the social and economic impact
of developments in the quaternary sector. (i)
• Economic impact:
1) Diversification of economy creating more jobs within
the country
2) Growth of a country’s GDP
3) Improve foreign trade relations with the world
4) Increase tax base for the country
• Social impact:
1) More opportunities to reinvest in fundamental programs
such as education and health care
2) Improved standard of living for its citizens
3) Opportunities for the country to increase its foreign aid
commitment to less fortunate countries.