APHG Chapter 12 SERVICES

Where are Services Distributed? Key issue 1 Where are Services Distributed?

This is replaced by a rise in SERVICE-RELATED JOBS. As a country transitions from SECONDARY to TERTIARY economic activity, the industrial sector declines. This is replaced by a rise in SERVICE-RELATED JOBS.

SERVICES are any job which fulfills a human need in exchange for compensation. They do not involve EXTRACTION or PRODUCTION of final goods (with some exceptions, like a BAKER)

SERVICES constitute more than 2/3 of GDP in most developed countries, but less than ½ in most developing countries.

SERVICES have accounted for most of the growth in worldwide employment in recent decades. US job growth 1975-2010

While PRIMARY (Extraction/Agriculture) & SECONDARY (Production) economic activity can be concisely described, TERTIARY (Service) activity is a far more broad category of professions.

There are THREE CATEGORIES of SERVICE jobs Consumer Business Public

HALF of jobs in the United States are in this sector. CONSUMER SERVICE JOBS provide services to individual consumers who desire and can afford them. HALF of jobs in the United States are in this sector.

Retail/Wholesale Fastest growing! Leisure & Hospitality Finance CONSUMER SERVICE JOBS Retail/Wholesale Health and Social Welfare Fastest growing! Leisure & Hospitality Finance

Facilitate/improve the activities of other businesses BUSINESS SERVICE JOBS Facilitate/improve the activities of other businesses

BUSINESS SERVICE JOBS Professional Services Financial Services Law, management, accounting, architecture, design, secretarial… Financial Services Finance, insurance, real estate… Transportation & Information Services Broadcasting, publishing, utilities…

Around 10% of jobs in the US are in the ‘PUBLIC SECTOR’ PUBLIC SERVICE JOBS GOVERNMENT positions provide services to people and businesses within a country. Around 10% of jobs in the US are in the ‘PUBLIC SECTOR’

Public workers hold positions within the FEDERAL, STATE, or LOCAL levels of government.

Local governments employ the most public workers, followed by state (#2) and then federal employees (fewest).

This guy will grow up to be a teacher.. Teachers at public school are part of the public sector- part of the LOCAL government. This guy will grow up to be a teacher..

SERVICES and the RECESSION The 2008 recession was triggered by the FINANCIAL SERVICES sector. Financial institutions engaged in several risky activities that caused the crisis.

SERVICES and the RECESSION These risky activities included: Rapid and unsustainable rise in real estate prices Issuance of ‘subprime’ mortgages to people w/ bad credit ‘Derivatives’ and other sketchy investment practices Reduction of regulations and oversight by government

Where are CONSUMER businesses distributed? Key issue 2 Where are CONSUMER businesses distributed?

Consumer and industrial businesses do not have the same distributions.

A YELLOW PAGES SEARCH FOR ‘DENTISTS’ IN NYC. Consumer services follow a fixed rule: the larger a settlement, the more services there will be concentrated there. A YELLOW PAGES SEARCH FOR ‘DENTISTS’ IN NYC.

Consumer businesses MUST choose the right location to survive. CENTRAL PLACE THEORY Consumer businesses MUST choose the right location to survive. CENTRAL PLACE THEORY helps to determine the most profitable location for a business.

A CENTRAL PLACE attracts people from the surrounding area to exchange goods and services. The area around a central place is called its MARKET AREA, or HINTERLAND.

Market areas are excellent examples of NODAL REGIONS. People near the ‘node’ are likely to use local services; those farther away are increasingly likely to go elsewhere for services.

Geographers use HEXAGONS to represent market areas. They combine the EQUIDISTANCE of circles with the TOTAL COVERAGE of squares.

To determine a market area using CPT, two pieces of information are needed: RANGE and THRESHOLD.

RANGE is the maximum distance people are willing to travel to utilize a service. Services have different ranges; while a fast-food restaurant might have a range of 5 miles, a pro sports facility might have a range of 60 miles or more.

People tend to think of travel in terms of TIME rather than DISTANCE, i.e. ‘10 minutes away’ rather than ‘3 miles away.’ Ranges may be very different for services in urban and rural settings, where travel conditions are very different. Each ring in this image represents ONE HOUR of driving time from Charlotte, NC

As a rule, people tend to utilize the closest available service- they will choose a Dunkin’ that is closest among those available. They will usually only break this rule ONLY if substantial cost savings are involved, or if there is a substantial quality difference.

The other component of CPT is THRESHOLD, which is the minimum number of people needed to support a service. Once a range has been found, a business must decide if enough people live within that area.

Census Data helps to locate these customers. Not everyone matters for threshold, however; each business looks for a certain type of CUSTOMER. Census Data helps to locate these customers.

An upscale department store like NIEMAN MARCUS would look for a market area with plenty of wealthy residents. A thrift store like SAVERS would look for a location where plenty of low-income people reside.

If the THRESHOLD is larger than the RANGE (like in example B), then a service will not be profitable.

1.) RANGE and THRESHOLD are computed Aside from CPT, services also use MARKET AREA ANALYSIS to determine the most profitable location possible. Even with acceptable ranges and thresholds, there is too much competition for another Kroger in Dayton! 1.) RANGE and THRESHOLD are computed 2.) COMPETITORS’ LOCATIONS are taken into account to determine MARKET SATURATION.

HEIRARCHY OF CONSUMER SERVICES Services with SMALL ranges, thresholds, and market areas are found in both cities and small towns. Services with LARGE ranges and thresholds, however, are ONLY found in larger settlements.

There are FOUR ORDERS OF SETTLEMENT- CITIES, TOWNS, VILLAGES, and HAMLETS.

Developed countries often have MANY small settlements with limited services , and FAR FEWER large settlements with wide-ranging services.

Given a flat area of land, market areas for these differently-sized settlements overlap in a regular pattern.

RANKING CITIES The ranking of cities by population produces one of two distinct patterns.

1.) Countries where the nth largest city is (roughly) 1/n the size of the largest city follow the RANK-SIZE RULE. NYC LA CHICAGO HOUSTON PHILA 8 million 3.9 million 2.7 million 2 million 1.5 million This is more common in developed countries. Services are widely available in smaller settlements.

Bangkok, Thailand is MANY TIMES bigger than the next biggest city. 2.) Countries where the largest city is AT LEAST twice as big as the next biggest have a PRIMATE CITY. Bangkok, Thailand is MANY TIMES bigger than the next biggest city. Visible in both developed and developing countries. This arrangement CAN result in difficulty acquiring services in areas far from the primate city.

Next biggest British city: Next biggest French city: Other primate cities… LONDON: 8.5 million Next biggest British city: Birmingham- 1 million PARIS: 2.5 million Next biggest French city: Marseille- 800,000

Other primate cities… With 9 million inhabitants, MEXICO CITY is six times larger than the next largest city in the country.

These urban rankings matter. In developing countries with a primate city, a person might have to travel for HOURS to reach a service available only MINUTES away in a developed country.

PERIODIC MARKETS In places that have too little wealth/population to support permanent services, they are often provided through PERIODIC MARKETS. These are markets which are only open on specific days, operated by mobile merchants.

Periodic markets follow different patterns in different parts of the world. In rural Africa, for example, markets open in small villages once every 3 to 7 days.