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Prepare by : Ashaduzzaman ID N0-130104008

EMBA , Summer-2013 Submitted to : S.M.Kaisar Nasim

Assistant Professor Department of Business Administration

European University of Bangladesh

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TOPICS : How can we identify a service industry ? What is the role of service industry in Bangladesh economy in respect of (a). Employment generation & (b). Volume of business

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. •Md.Nazrul Islam ID.130104009•Md. Abdullah Al Mamun ID.130104011

. •Md.Khorshed Alam ID.130104010•Md.Evana Parvin. ID.130104012

. •Md. Nurul Huda,ID.130104015•Md.Sajedur Rahman ID.0130102007

Ashaduzzaman ID 130104008Team Leader

comprising :

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CONTENTS

Prepared by. (page no-1 ) Topics. (page no- 2 ) Acknowledgement. (page no- 3) Service Sector in Bangladesh. (page no-5 ) Introduction (page no- 6-7 ) service industries Includes (page no- 8 ) Importance of Service Sector (page no- 9 ) Service Sector and GDP (page no- 10 ) Share of services: Compare Bangladesh to other countries (page no-11-12 ) Trend of Structural Transformation of Broad Sectoral Shares in GDP and Growth

Rate at Constant Prices (Base year: 1995-96) (page no-13 -14 ) Share of Service Sector in Employment (page no- 15 ) Sectoral Composition of Employment (page no- 16) Source (page no-17 )

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Service Sector in Bangladesh by corporate logo (5)

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Introduction : (5)The tertiary sector of the economy is known as the service sector or the service industry is one of the three economic sectors. The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability, what is termed affective labor. The basic characteristic of this sector is the production of services instead of end products Services (also known as "intangible goods") include attention, advice, access, experience, and discussion. The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector.

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For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation. The tertiary sector is now the largest sector of the economy in the western world and is also the fastest-growing sector. "In the United States 70 percent of the workforce works in the service sector; in Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many of them are in the professional category. They are earning as much as manufacturing workers, and often more.”

Introduction :

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service industries Includes

1. Government 12. Telecommunication2. Pharmaceuticals 13. Hospitality/Tourism3. Mass media 14. Healthcare/hospitals4. Public health 15. Information technology

5. Waste disposal 6. Financial services -- Banking & Insurance

7. FMCG 16. Legal services 8. Construction 17. Food processing

9. Consulting 18. Gambling 10. Retail sales 19. Franchising 11. Real estate 20. Education

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Importance of Service Sector

In the era of global economic integration, competitiveness plays a vital role in the success of international trade. In addition, the competitive environment of domestic markets facilitates higher economic growth and can help in reducing poverty. Competition in the services sector can therefore play a fundamental role in ensuring the competitiveness of an economy. Services are used intensively in the production of all goods, making up around 10-20 percent of production costs in both manufacturing and agriculture, and sometimes more. Over the years, it has increasingly played an important role in economic activity and displayed more dynamism than other sectors. This has led to most countries seeking export markets for services.

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Service Sector and GDP

Over the past three decades, Bangladesh has evolved from a controlled economy to a market oriented economy through a wide range of policy reforms which include reforms in trade policy, industrial policy, monetary and fiscal policy, exchange rate policy, and promotion of foreign direct investment. Trade liberalization has been one of the major policy reforms in Bangladesh. During the course of the overall trade liberalization programmed, the liberalization of service sectors (especially telecom and financial sectors) also received much importance. Service sectors areincreasingly becoming the core of Bangladesh economy. Inthe context of South Asia where growth rates in servicessector has been fluctuating during the last two and a halfdecade, India and Bangladesh have been the exceptionswith consistent growth.

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Share of services: Compare Bangladesh to other countries

Value added in the services sector as percent of GDP: For that indicator, The World Bank provides data for Bangladesh from 1980 to 2011. The average value for Bangladesh during that period was 49.53 percent with a minimum of 45.79 percent in 1985 and a maximum of 53.51 percent in 2011. The services sector includes wholesale and retail trade, transport, financial services, education, health care, and real estate. (1)

The share of services in GDP [1]

60% or more 50%-59% 40%-49% 30%-39% Less than 30% No data12

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Share (in Percentage)

Sector 1980-81

1985-86

1990-91

1995-96

2000-01

2005-06

2009-10

2010-11

2011-12

Agriculture 33.07 31.15 29.23 25.68 25.03 21.84 20.29 20.01 19.29

Industry 17.31 19.13 21.04 24.87 26.20 29.03 29.93 30.38 31.26

Service 49.62 49.73 49.73 49.45 48.77 49.14 49.78 49.60 49.45

Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Trend of Structural Transformation of Broad Sect oral Shares in GDP and Growth Rate at Constant Prices (Base year: 1995-96) [2] [7]

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Average growth rate( in percentage) [3)

Sector 1980-81 1985-86

1990-91 1995-96 2000-01 2005-06 2009-10 2010-11 2011-12

Agriculture 3.31 3.31 2.23 3.10 3.14 4.94 5.24 5.13 2.53

Industry 5.13 6.72 4.57 6.98 7.45 9.74 6.49 8.20 9.47

Service 3.55 4.10 3.28 3.96 5.53 6.40 6.47 6.22 6.06

GDP (At producer prices)

3.74 3.34 3.24 4.47 5.41 7.02 6.22 6.59 6.39

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Share of Service Sector in EmploymentService sector employment has also shown a rising tendency but its

contribution to total employment is much lower than its contribution to country’s GDP. There was a sharp rise in employment share of the agricultural sector in the eighties from 58.8 percent in 1982-83 to 66.4 percent in 1989-90. Since then Bangladesh economy has been witnessing a declining trend in the employment share of agriculture. The share of agriculture in total employment reached to 51.7 percent in 2002-03, which signifies the increase of non-farm activities during that period. On the other hand, the share of the manufacturing sector in total employment increased from 11 percent in 1982-83 to 13 percent in 1989-90, however declined to 9.6 percent in 1995-96, which again rose to 13.7 percent in 2002-03. The employment share of the service sector has been somewhat unstable during the last two decades. During the late 1990s and early 2000s, when liberalisation of some services sectors, like telecommunication and financial intermediaries, was one of the major policy reforms, the employment share of service sector grew substantially, which reached to 34.6 percent. [7]

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Sectoral Composition of Employment [3]

Year Sectoral composition of employed workforce (%) [8]

Agriculture Manufacturing Service

1982-83 58.8 11 24.2

1984-85 57.7 11.5 26

1989-90 66.4 13 16.2

1995-96 63.2 9.6 25

1999-00 62.1 10.3 23.5

2002-03 51.7 13.7 34.6

2007-08[9] 45 30 25

Sources:

1. The global economy. com,world bank2. Bangladesh Bureau of Statistics (BBS) * Provisional

–(2012)/ Bangladesh Economic review(2012)3. WDI-20124. www.google.com/immage5. www.wikipedia.com6. Bangladesh bureau of statistics 20127. .8. Bangladesh economic review 20139. http://www.theodora.com/wfbcurrent/bangladesh/

bangladesh_economy.html

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Thank you