Business services are a broad term for the activities or functions that benefit businesses without producing tangible goods. The industry is a significant source of profit for most companies, and includes a variety of sectors that can be considered as non-financial service providers.
They are often regarded as the largest sector of the economy, and contribute to 11% of EU GDP. They include a wide range of areas, from technical to professional services such as legal, human resources and facilities management.
In contrast to the traditional notion of economic services, business services are a subset of the general category of economic services. The difference is that they are concerned with the building of service systems, involving both service consumers and service providers. They are also concerned with providing quality customer experience and they are often involved in the production and distribution of physical products.
This definition of services is important, because it enables us to understand the distinction between a pure service business and a commodity good. Many things fall on a continuum between these two, and some businesses produce both services and physical goods.
Examples of pure service businesses are airline, bank and computer services bureaus. Others include legal, plumbing and electrical repair firms, cinemas, and management consulting companies.
These are a small number of the large and diverse sector that is categorized under business services, with a total of over 420,000 establishments in the United States alone. The industry is characterized by low barriers to entry and high competition.
One common type of business service is the delivery service, which provides companies with essential items like office supplies and transportation. Other business services include real estate services, which help companies find and rent space.
Employee benefits are also a common area of focus for business services. This includes medical, day care and fitness services, which can help employees maintain a healthy work-life balance and increase their overall job satisfaction.
Another common business service is utilities, which provide companies with water, electricity and gas. These services keep workplaces running smoothly and allow businesses to save money by not having to purchase or install their own infrastructure.
The service industries are an integral part of the commercial world and are a vital component to any business’ success. They are crucial for large firms, but they can also be beneficial for smaller companies that rely on them for everything from production to marketing.
Business services are a key consideration in the decision-making process of most businesses. They help the company to focus on its strategic-based internal goals while outsourcing some of the labor that requires specific expertise.
They also help the company to cut down on fixed costs and outsource non-core business processes. As businesses increasingly turn to third parties to deliver non-core services, we expect to see an increased opportunity in the business services sector.
The business service sector is a critical component of the European economy, and the European Commission recently launched a High Level Group on Business Services to examine the sector’s untapped potential. This will help to identify new opportunities for the sector and stimulate policy development.