In most industrialized economy expenditure on services is growing due to the following
Advanced in technology that has led to more sophisticated products that require more services.
Growth in per capita income has given rise to a greater percentage of income being spent on luxuries such as restaurant meals overseas holidays and weekend holiday breaks.growth is in per capita income is also increasing the demand for financial services such as insurance and pension.
Companies are outsourcing heavily.companies are buying services that are outside their core expertise. Most companies are now buying services like cleaning catering warehousing transportation and so on.
Governments are moving out of businesses and deregulation has increased the level of competition in certain service industries like telecom and airlines.
This has resulted in expansion with more customers availing the services as prices are going down due to competitive actions.
Simultaneously, companies are advertising more and wooing customers more stridently, further fueling demand for services.
Due to growth in per capita income, people are buying more goods which have contributed to making relating important services.
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