unit 9 service sector

GEOGRAPHY AND HISTORY DEPARTMENT

Teacher: Maite Fresnillo

UNIT 9: SERVICE SPACES

1. Spain’s economy towards third sector

The third sector comprises services given to society. It is a heterogeneous sector. It started its expansion since the 60s decade and nowadays it occupies more than half of the working population.

The reasons for the development of third sectors are:- increase of living standards- industry requires some services and its development implied the development

of other activities, banks and others- development of tourism- increase of public services- entrance of women in the work market (need for kindergartens, for instance).

2. Heterogeneity from region to region

Service sector is heterogeneous and there are several ways of classifying the activities involved in it:

- private and public sectors- services devoted to sales- intermediate services or last consumption services- interrupted services or in different levels

In Spain the third sector presents some lacks. The main activities are traditional and services offered to companies are not very important.

- Services provided by State Administration are the most important because they create a good number of jobs, followed by commercial services.

- Taking into account the number of workers some of them have lost weight: transports and telecommunications, immovable assets, credit and insurances, management and supply services.

- Services given to companies are not very developed but their evolution has been positive (lawyers, accountancies, management).

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- Hotel and catering have improved and linked to them tourism and other free time activities.

In all Autonomous Regions third sector is hegemonic, judging by their part in the GDP or the number of people involved in tertiary activities. Anyway there is disequilibrium between regions because even if they can be established in any place, there are some conditionings: population volume, urbanization level, development and rents.

a) Jobs are more abundant in tertiary sector, mainly those related to tourism near the coasts, related to State administration in Madrid. The importance is smaller in agricultural territories.

b) The different sectors of tertiary sector have different weight.

- Services addressed to companies are developed in few provinces- Services linked to consumption are more common in touristy areas- Non specialised services: those controlled individually.

In the future the differences inside the tertiary service may increase. The situation nowadays is similar to other European countries. The development will be aimed at improving quality and diversifying services.

3. Transports and communications

Transport system is devoted to transport people and products from a place to another. It has an important role in economy and spatial organization:

a) Transports and territories influence each other:a. Transports indicate population distribution and spatial disequilibrium of

development, because they tend to be located in capitals or economically important areas

b. They can influence on changes because they are a key element to develop regions.

b) Transports net organise the territory: they link different regions and movements are easier and faster thanks to new technologies.

Characteristics of transport system

a) Physical environment is not good: relief is complicated and some elements of the climate make communications more difficult. Thanks to modern technologies some difficulties have been overcome but costs are high and this reduces productivity.

b) Land and air nets are radial: They tend to link any point of the geography with Madrid. This model started with the Bourbons and continues nowadays.

c) The main transport used by passengers and products is motorway because they offer direct service at arriving at any point.

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d) The net has important disequilibrium from one region to another: there are some main axes while other regions lack of communications.

e) Jurisdiction over transport has been decentralized with the creation of autonomies: the State controls national communications whereas autonomous government control communications operating in their regions exclusively

f) Transports in Spain are controlled by the Guide Plan for Infrastructures; depending on them transport policy is part of the territorial organization, one of its aims is to increase speed and reduce the number of accidents; they promote the links between different regions and communities; they try to recover spaces degraded through public works.

g) Spain’s communication net is included in the European net and some European policies are used:

a. Improve links with the EUb. Fund of the EU are directed to the improvement of infrastructuresc. Reduce the impact of communications in environment by assuming

appropriate measures.h) Communications have an impact in environment: visual, sounds, pollution, due

to these projects are studied to valuate the impact aiming at correcting possible problems.

Road transports

Road net links populated regions. It is an essential infrastructure. The characteristics of Spain’s motorways are:

a) Radial structure: a majority of the roads crossed Madrid, establishing links with developed and industrialised areas.

b) The control of the roads belongs to the State, Autonomous communities and Provincial governments.

c) Technical characteristic are varied, being the most appropriate those of national level whereas others present more deficiencies.

d) It is used by a majority of the traffic of people and products.e) There are important differences between regions:

a. Density is higher in developed and industrial areas, in areas with spread population, in regions with divided by the orography or islands.

b. Intensity of traffic is higher in indirect corridors because in them are the main industrial and touristy spaces.

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c. Communications easiness in industrial or touristy regions due to the needs.

f) Guide Plan for Infrastructures 1993-2007 had as objectives:a. A complete development of communications all over the Stateb. Improve the quality and security of motorwaysc. Stress the development of indirect axes

g) Spanish roads must have a better link with the EU, for that new motorways are projected and the capacity of the existent ones is going to be developed.

Train transports

Train was the main means of transport during the second half of 19 th century and the beginning of the 20th. After that the situation changed when new transport appeared and the critical financial situation did not help its development because exploitation costs are very high. Due to this many lines have disappeared but some of them have changed their orientation to be left for tourism.

The main characteristics of Spain’s train net are the following:a) The Spanish Train National Net (RENFE) controls 90 per cent of the traffic. It has

radial distribution and then tree structure in cities of secondary level, what permits to cover big areas with few lines and reducing costs. EU has urged Spain to limit the role of RENFE in railroad’s financiation. There are other lines such as:

a. Train of narrow railway (FEVE), it is developed in the Northern area, Catalonia, Valencia, and other places. It is specialised in short distances.

b. High Speed trains (AVE): It still being developed at the moment.b) Lines have important technical contrasts: some lack of modern materials or are

not properly electrified or count just with a railway. All of them require to be modernised.

c) Traffic must be oriented to the transport of passengers and products: Passenger transport is profitable nowadays in peripheral areas and in the case of products this means of transport is appropriate for important weights of huge volume.

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d) There are regional differences in equipment and investment: the most important areas are those of big cities while there are regions with poor infrastructures due to the lack of investment.

e) Guide Plan of Infrastructures wants to increase the traffic to close areas, improving the lines and increasing speed.

f) Spanish railway net must be better integrated in the EU net: new trains will have the same weight of Europeans and huge investments are required in order to create profitable services.

Sea transports

The characteristics of transport by sea are:

a) The net of ports is controlled by the State and the Autonomous Governments. States controls ports devoted to trade activities while smaller ones, mainly indicated for fishing or sportive are under the control of autonomous authorities.

b) Passenger and trade traffic present huge differences:a. Passengers: it is scarce, being only important between Algeciras and

Ceuta or in the islands.b. Traffic around the coast (cabotaje) is used for the transport of

petroleum and its derivates because refineries are near the coast.c. International trade: it is the most important because imports and

exports have been done using this transport:i. Tradition: for import and export raw materials for the industries

or petroleum derivatesii. Nowadays: the most generalised are general products, at least

those that can be transported in containers. It is practised in huge ships in order to reduce costs.

c) Technical improvements are needed in ports: surface and communication links need to be improved.

d) Disequilibrium between regions as long as equipment and inversions are concerned: the biggest works are done just through a limited number of ports.

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e) Guide Plan for Infrastructures puts the conditions for the distribution of products and specialization.

f) European Union prepared the Green Book of sea and ports and they try to avoid competition among ports.

River transports

The only port in a river is that of Seville in the Guadalquivir. This port has to face some problems mainly that of the sand in the entrance. Sedimentation is closing some parts and the traffic is more and more limited. Its hinterland is important, in the whole valley of the Guadalquivir and Extremadura.

Air transports

It has developed quickly because income has increased, economic space has changed its organization, the demand of tourism, jobs and businesses and international flights are abundant. Its characteristics are:

a) Airports’ net is quite developed since the 70s in which it was decided that every city of a certain size should count with one. The net is organised in and hierarchical way: Madrid hub has connexions with all the airports in Spain.

b) Passengers and products’ traffic is very different:a. Air transport is competitive in long and medium distances because it is

fast and comfortableb. Product traffic is scarce due to its high cost so that it is only used for

deciduous or expensive products.c) There are regional differences: Cities such as Madrid, Barcelona, and Bilbao

have international airports whereas there are a lot of small airports that are not profitable.

d) Guide Plan for Infrastructures aims at improving airports and the links of the cities with these places.

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e) European Union has liberalised the tariffs of air services so that some companies have become private, as the case of Iberia, in order to reform their finances.

Communications

Long distance communications and telecommunications are essential nowadays. Thanks to them information can be shared quickly and this is very important in our global world. In our society the location of a company is not important because what really matters is to be well connected to information nets.

In Spain telecommunications and mainly telephone net have improved even if it still being delayed in comparison with other countries.

Telephone flux is hierarchical with the highest concentration in big metropolis such as Madrid, Barcelona, Valencia, Seville and Biscay. The rest of the provinces are in a secondary position and there are regional sub-systems.

4. Tourism spaces

The term tourist was coined in Britain in the 18th century to refer to a person who liked to travel due to cultural or spare time reasons. During the 19th century this activity was elitist but nowadays it is a phenomenon generalised.

Factors to develop tourism in Spain

Since the 1960s Spain experienced a huge development of this sector and nowadays is one of the countries with a higher potential. The increase answered to internal and external factors:

a) External factors were:a. Economic development in Europe after WW2 that increased the

spending power of middle classes who started travelling abroad. In addition to this workers started having paid holidays.

b. Development of transports that made easier movements and prices became lower.

b) Internal factors were:a. Spain was near the European costumersb. Climate and landscape, mainly beaches, were attractivec. It is cheap for foreign tourist, specially since the peseta devaluation in

1959

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d. State gave advantages to the development of this activity because the money made with tourism equilibrated the payment scale.

e. Hotel and important travel agencies have appeared.

Nowadays those factors are not as important as before and others must be taken into account:

- strengthen of internal demand- quality of the offer that takes into account environmental measures- diversification of the touristy products offered- existence of human resources at hand- improvement of communications and infrastructures- promotion- in places that can compete with Spain there are political problems (Northern

Africa, Balkans)

Traditional touristy model

The model created in the 60s has an important offer addressed to a great number of costumers who have medium or medium-low acquisitive power and who are looking for hotels of medium category in beaches or coastal places. In addition to this, it was linked to the tour-operators and a big part of the expenses made by tourist escaped to foreign countries.

Touristy offer

Those selling the product are organizations or tour-operators and touristy installations (hotels, restaurants).

Accommodation offer is wide and it is very developed along the Mediterranean coast and the islands, even if during the last years there is a trend to develop interior regions.

Feeding offer is wide, including very different categories.

Offer for free time activities is increasing with sport installations, parks, water-parks, equestrian clubs, golf clubs and nautical installations.

Touristy demand

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At the beginning foreign was the main one but nowadays there is an important one in the interior too.

a) International demand has increased since the 1950s, but the exception of the years of the crisis. The main demand comes from Europe: Germany, Britain, France, Netherlands, Italy and Portugal. They come normally in summer and they look for sun and beaches.

b) State demand increased since the 1960s. It comes from the industrialised areas to others with lower population or the coast.

c) Seasonality of the demand is one of the main problems because it tends to concentrate in summer time, with the exception of snow-tourism. As a consequence installations are over exploited during some months and almost completely left apart during others.

Crisis of the traditional model and alternative tourism

Reasons for the crisis

Although the number of tourist and the amount of money produce by tourism have increased, the traditional touristy model is in crisis because of the following reasons:

a) A majority of the tourists is of medium or low-medium levelb) Touristy offer has some problems such as the increase of prices without

improving quality, the lack of accommodation to the new demand, to be seasonal and the geographical disequilibrium.

c) Dependency towards international tour-operatorsd) Damage to the environment and changes in the landscape.

Alternative tourism and new touristy policy

To answer to the problems the restructuring of the sector was needed and the basis for that has been the policy of territorial organization. The objectives of touristy policy are:

a) Promote tourism of qualityb) Improve the offer, with new modalities

a. Tourism for third ageb. Sport tourismc. Agricultural tourismd. Eco-tourisme. Tourism linked to cities, culture, congresses and conventions

c) Reduce the dependency of the exteriord) Unify touristy development and environmental quality

Touristy space and typology

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Touristy spaces are those that attract a lot of tourist. In Spain the highest density is linked to sun and beaches, this is Balearic Islands, Canary Islands, and Mediterranean coast. Madrid is the centre of cultural tourism. After those are the North Western coast and the Northern coast.At the same level of that regions are some touristy points that are highly profitable, for instance, areas with sky stations, rural tourism or historical cities.

All those regions can be classified depending on the uses:- seasonal touristy regions- steady tourism

4.4.1. Areas with sun and beaches

There are located in the islands or the Mediterranean region. They receive abundant tourism thanks to their climate; anyway, there are several differences:

- Facilities for communication, essential for the arrival of tourists.- Ways of occupying the space: touristy installations are abundant- Kind of guesthouses, quality and costumers

4.4.2. Other touristy areas

Since 1990 tourism has developed in the space due to:- Close tourism has increased due to urban accumulation- Agricultural regions of the interior have developed strategies to attract tourism- Coastal spaces have been structured and also the area near them- Demand asks for quality and attractiveness.

In this way, apart from the tourism of coast other kinds of tourism have developed:- Madrid: being the capital its tourism is not seasonal and it is linked to its

cultural offer.

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- Canary and Galician coasts and the interior have developed their natural spaces- Rural tourism is linked to agricultural

activities- Sky stations are the basis for snow tourism- Historical and artistic cities: they can offer

museums, and historical neighbourhoods.

4.5. Influence of tourism in the space

Tourism has a great impact in territory. This impact is notorious on the coast but it also affects other territories.

4.5.1. Demographic influence

- In coastal regions population increases, mainly with young populations looking for jobs. Other times people from other countries or other regions tend to move there.

- In rural areas sometimes provokes the emptiness but for the cases of historical cities.

4.5.2. Influence in populate

- Coast: tourism supposed the creation of new population structures, such as conurbations in these regions. There is also a huge density of constructions.

- Rural and urban areas tourism has been helpful to restore old areas.

4.5.3. Economic consequences

- Tourism creates jobs because it requires a lot of people. It supposes more than 9 per cent of active population but the problem is that a majority of the jobs are seasonal.

- It has a multiplying effect in other activities- It supposes about the 12 per cent of the GDP- It equilibrates the payment balance and it is used to reduce exterior debt.- It has a great influence in transport policy.

4.5.4. Influences in politics, culture and sociology

- Thanks to tourism countries are closer and there are cultural links among them. This eases the relations between countries.

- It has an influence in the live of local populations, sometimes in a negative form because some traditions are lost.

4.5.5. Influence in territorial organization

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a) In regions with well developed tourism, spaces around have been affected, in order to provide free time spaces: sports, services.

a. Transformation of environment and landscapeb. Economic transformationsc. Problems to control the use of soil and resources

b) There are concentrated in areas I which tourism is interestedc) In rural areas tourism can create problems because they can influence in other

activities.

4.5.6. Environmental influence

These are the reasons:- The sector has developed in a short period of

time, in a limited space and when environmental measures were not defined.

- Urbanization process was done without taking into account the damage to environment

- Protection and recovery policies have been taken during recent years.

5. Interior and exterior commerce

Commerce is the activity that offers products and services to consumers. It can be practised inside the State borders of out of them.

5.1. Interior commerce

It has the following characteristics:a) Localization: they require communications to be close to producers, markets

and costumers. Good transport’s net united to high density population with high acquisition power are essential for commerce.

b) Structure: it has suffered important changes during the last years. Those changes have affected:

a. Distribution channels (intermediaries have disappeared)b. Consumption: rents have increased and with them demandc. Distribution: selling in auto-service or great companies that reduce the

number of workers and offer better pricesd. Equipment: technology related to salese. Payment ways

c) Typology: The following systems can be found:a. Wholesales commerce: they concentrate products and they send them

to minor sellers. It has central location.b. Minor sales: they sell directly to the costumer and there are different

varieties:i. Traditional commerce

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ii. Modern commerce1. self-services2. storehouses3. regional commercial

centres4. hyper markets

d) Commercial areas are the regions where people move to get the products they are looking for.

e) Commercial policy: it has followed the Frame Law of 1995 to try to increase profitability of minor commerce by increasing qualification; increase innovations with new technologies and management; liberalizing timetables and others.

5.2. Exterior commerce

This activity consists of exchanging products and services with any other area in the world. Both, imports and exports have increased during the last years thanks to global commerce.

a) Exports: products of primary sector have lost importance in benefit of half manufactured industrial products, equipment, cars and consumption items. In imports energy and some industrial products are the leading ones in addition to agricultural.

b) Areas of exterior commerce have changed mainly after the entrance in the European Union. The EU is the main area for exports and imports of Spain, but the problem is that Spanish products are not of high productivity.

c) Commercial policy has been influenced by the entrance in the only market and the agreements signed with the World Commerce Institution. The Spanish exports policy want to offer advantages thanks to a series of measures:

a. Organization of fairs and shows to make their products known and trips to other countries to present innovations

b. Give to companies information about foreign opportunitiesc. Credits for developing commercial nets in the exteriord. Funds for Development Aid have been created in cooperation with

other countries to put into work commercial policiese. Aids to small companies to open to the international market.

6. Tertiary sector space in the Basque Country

The process of the tertiary sector in the Basque Country has developed due to several factors, such as the existence of Autonomous Communities (Basque and Navarre) that have

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their own services, the per capita income and life quality are quite high and companies demand more and more services.

In the Autonomous Community of Euskadi more than half the active population works in this sector. Three are the factors that have influenced in this situation since the 60s:

- Crisis of the industries: a lot of workers passed to the tertiary sector- Entrance in the European Community, what implied to accommodate to the

new policy - Autonomous processes that resulted in the development of public sector.

Anyway, the importance of the service sector in the Basque Country is smaller than in Spain because in this Community industry continues having an important weight.

6.1. Transport system and communications

Transport infrastructure is important. However, there are differences depending on the territories and it can lack of some functions. The links between the three capitals, rural nucleus and street nucleus are not good. In addition to this, some areas have a deficit of infrastructures or there are obsolete and need to be repaired.

6.1.1. Motorways

In the Basque Country road, motorways and double line roads are improving constantly and their main characteristics are:

- There are North-South and East-West nets: Madrid-Irun, Madrid-Bilbao and Bilbao-Behobia. There is also a link with the Ebro’s corridor uniting Basque Provinces with the Mediterranean coast.

- Links between the three Basque capitals.

- Local roads.

The net and its functions are different depending on the territory and in order to reduce them the Plan of Motorways of the Basque Country was made with the aim of improving the links with the European net and between the three territories.

6.1.2. Trains

The most important lines of long distances are: Madrid-Irun in the axis Madrid-Paris, Bilbao-Miranda, linking the Basque Provinces with the Meseta, and Vitoria-Pamplona and Bayona, linking with Burdeos and Toulouse. Trains of narrow width are not very appropriate but there are useful in short distances. In the case of Bilbao the

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underground must be added, linking all the metropolitan area. There is also a project of this kind for San Sebastian.

The main objectives of the railroad communication are:- Improve the links with Spain and Europe- Improve the links and the speed between the three Basque capitals with high

speed trains. This is the project known as the Basque Y.- Promote services in metropolitan areas to avoid traffic jambs.- Finish the second line of the Bilbao’s underground.- Adapt train stations to high speed trains, create more trains stations and

prepare other more for products: an autonomous port in Bilbao, an interchange area in Guipuzcoa and an integrated transport hub in Alava.

- Integrate train in cities and improve stations.

6.1.3. Ports

The most important are Bilbao, Pasajes and Bayona. Through those ports there is a great exchange of products with foreign countries. In addition to them there are other smaller ports for transport, fishing or sport.

- Bilbao’s port expands its hinterland to the whole Basque Community and other close areas. Its problem are the bad links with roads and trains what demands improvements:

o Create a Multifunctional Station to bring products to the port by traino Logistic companies should be integrated in the porto Create a free area to increase the size of sea transport, at least as long

as lines with the US and Latin America are concerned.o Bring the port out from Bilbao to make urbanize the area.

- Pasajes’ port is specialised in raw materials, iron and cars’ import and export. In the future they want to develop a industrial area and a sport port as well. There is a project for a port in the outside of the outlet that would take bigger ships, but its future is not assured because it is a controversial project.

- Bayona’s port is one of the most important of France, specialised in chemist and fuels.

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- From the rest of the port Bermeo, Lekeitio, Ondarra, Motrico, Zumaya, Hendaya and San Juan de Luz should be mentioned.

6.1.4. Airports

They have limitations because of the mountains and the climate that do not make easy their traffic. The most important is Loiu in Bilbao, directly link to the active economy of the region. Hondarribia is quite stable and Foronda in Vitoria is an infrastructure of high quality. In Northern Basque Country Biarritz is important and in Navarre Noain.

There are aims to create a Basque Airport System to be more specialised.

6.1.5. Telecommunications

There are essential in our global society. Basque Country is very developed in this field, mainly in the area of the technological park of Zamudio. The connexions with all the world are made through the satellites Eutelsat, Intelsat and Hispasat.

6.2. Tourism

It started in the Basque Country in the 19th century when the high classes started coming to have baths. Some of them built in this region their residences, being the most important San Sebastian and Biarritz. Since 1830 the royal family started coming to these cities. In addition to this, Zarauz and Lekeitio became touristy centres for the high bourgeoisie.

6.2.1. Limits and benefits of Basque tourism

Although it started early, Basque tourism is less developed than in other regions due to the following reasons:

- climate is not appropriate- touristy offer was faced with some difficulties such as lack of international

promotion, intermediaries, limited hotel offer, lack of diversification of the product.

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About 60 per cent of the tourists come from the rest of the Spanish state, 29 per cent are foreigners and 11 per cent are Basque. In general the massive movement happens in summer.

Basque tourism has high potentialities:- geographical location- good communications- traditional tourism is exhausted and new models are being developed

The main resources are:- natural beauty of the coast- gastronomy- folklore- regional sport- craftsmanship - archaeology- museums

6.2.2. Tourism types

Thanks to the resources, there are different kinds of tourism:- Coast tourism: in summer. The most important locations are Biarritz, San

Sebastian and Zarauz, lacking the rest of the cities of enough hotel infrastructures

- Ecotourism, rural tourism and sport tourism have experienced an important increase and new installations have been created.

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- Culture, congress, conventions and business tourism has increased.

6.2.3. Touristy policy

The aims of this policy are:a) Increase the importance of the tourism, for that some activities are being

promoted:a. Design promotion campaigns b. Improve offer by developing infrastructures and services

b) Support sustainable development and equilibrium in touristy activity.

6.3. Commerce

6.3.1. Interior commerce

During the last years unemployment has been reduced in this sector and familiar rents have increased.

a) Small commerce even if feeble has some advantages:a. There is quite high density of small shops what is favourable for their

development. Their size is small and some of them do not count with appropriate installations but there is scarce tradition in uniting shops what makes more difficult the introduction of innovations. Sometimes in the periphery of cities commercial areas are created and these tend to be more active.

b. Their advantage is their location in city centres, they adapt to changes quite quickly, and their accessibility for costumers is essential.

b) Wholesale commerce does not count with a well developed logistic distribution what is prejudicial

c) Basque commercial policy has as objectives:a. Modernizationb. Competitiveness c. Specialised workers

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In addition to all this, urban commercial centres have been reinforced with new urbanization.

Finally they want to modernise and divide to reduce costs and open to the nation what would be beneficial for the development of the sector.

6.3.2. Exterior commerce

Exports suppose about a quarter of the GDP in the Basque Country. Their main costumer is the EU. The sectors that export more are equipment and metallurgy. The result of international trade has been positive during the last years.

Basque companies have very clear that to open to the international market is essential and during the last years they have made great efforts. Anyway, the main problem is the small size of the companies and the lack of planning. This is evident in exhibition centres such as in Bilbao (BEC).

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unit 9 service sector

Documents

specialised services

supply services

commercial services

diversifying services

provinces services

maite fresnillo services

public sectors services

public services entrance