what would be positive and negative aspects of a serviceknow

what would be positive and negative aspects of a service/knowledge- based economy

Solution

Service/knowledge based economy is usually an economy where the third or tertiary sector is the main source of income and share a large part in the countries\' national income.

Usually the developed countries are service based economy, for example USA.

Positive aspect of the service based economy :

1. The service based economy is more flexible and easy to overcome recession, and other downturns than the economies which are based on other two sector i.e., primary and secondary sector. It is so because the the supply of services are not required that much time which is required by a primary or secondary sector product. You have to wait till the product like wheat, rice, cloth, etc. has been produce but the supply of services or not rigid but very flexible in comparison of other sectors.

2. The service based economies are helpful in reduction in environmental degradation. As these economy usually depend on the service products and the industrial products are usually outsourced by other countries so the pollution by using industry or due to production of industrial products are very less in service based economies.

3. These economy usually experience faster growth than those economies uses traditional pattern (i.e., primary and manufacturing sector ) for the growth of the economy.

4. These economy uses less energy and resources and more knowledge, so they are more focused on sustainable growth.

5. As these economies are usually dependent on knowledge and services, there is enhancement of knowledge, it means more skilled workers and more innovation.

Negative aspects :

1. As these economy are usually focused on research and development and uses the time and energy on innovation, the manufacturing sector left behind and people are usually depended on other countries or in other words, depend on imports.

2. Because of increasing dependency on other countries for the products of manufacturing sector. The trade deficit has been increasing.

3.Due to based on services, the jobs of manufacturing sector lost and now more skilled labour is required. The less skilled or semi skilled labours who were working in other two sectors are seeking jobs.