Business services are the non-product generating activities that serve as the backbone of businesses and organizations. They include everything from human resources and IT to marketing, legal and accounting. These intangible services are important because they help businesses save time and money by allowing them to focus on their core competencies rather than on supporting activities. The services are typically outsourced or provided by third-party providers.
The Business Services supersector group includes the following subsectors:
This is an important sector for the economy because it provides many jobs, especially in the areas of health care and education, and it also offers a significant amount of export revenue. The sector is highly diverse, and it offers a wide variety of opportunities to potential employees. There is still considerable untapped potential in the sector, and policy makers are taking steps to encourage it.
Business services are intangible, meaning that they do not result in the creation of any physical products or materials. This contrasts with goods, which can be produced and stored for future use. This is one of the primary reasons that businesses outsource their business services. In addition, service production and consumption occur simultaneously, so that a company’s consumers can receive the benefit of a service at any time.
Outsourcing is a common practice among companies because it can improve overall efficiency by freeing up valuable in-house resources. It can also provide access to specialized expertise that a business may not have in-house. It can be more cost-effective than employing an in-house employee, and it allows a business to scale up or down depending on its current needs.
There are several types of business services, but some of the most popular include:
Some of the most important services that a business provides to its customers are those related to financial activities. This includes banking, insurance and investment management. Other important business services are communications, IT and transportation.
Marketing is a crucial business service that helps companies promote and sell their products to customers. It can be outsourced to agencies that specialize in creating and implementing marketing strategies, increasing return on ad spend and improving brand visibility.
Another type of business service is human resources, which encompasses all aspects of managing the workforce. This can include recruiting, training and development, and payroll. Other important human resource business services are employee assistance programs, wellness initiatives and workplace safety. Other business services include information technology, which encompasses all technologies that support and enable business processes. It can be outsourced to managed service providers or in-house employees. Business services are important to the economy because they create millions of jobs, provide a range of benefits for workers and consumers, and contribute to export revenues. They are a key component of a modern economy. Despite their importance, these services continue to face challenges, including low productivity, persisting legal barriers and global competition. The EU is taking steps to address these obstacles, particularly through its Internal Market legislation and policy actions.