QUATERNARY SECTOR OF THE ECONOMY: CHARACTERISTICS AND EXAMPLES - CULTURE VOCABULARY - 2025

The quaternary sector of the economy is based on the intellectual activities associated with government, culture, libraries, scientific research, education, and information technology.

It includes the person who relies on people associated with the tertiary sector and the professional in charge of a certain department or section. Some examples of someone with a job associated with the quaternary sector of economic activity might be a store manager, a school principal, or a regional business supervisor.

The quaternary economic sector is said to be that of intellectual organization in a society such as government, research, cultural programs, information technology, education, and libraries.

The quinary sector is thought to be related to the quaternary sector, but only includes top management levels. The top management of non-profit organizations, the media, the arts, culture, higher education, science, technology, and government are all included in the quaternary economic sector.

Description of the quaternary sector

The quaternary sector of the economy is a way of describing a part of the knowledge-based economy that typically includes services such as information generation and exchange, information technology, consultation, education, research and development., financial planning and other knowledge-based services.

The term has been used to describe media, culture, and government. The term is a new delimitation of the hypothesis of three sectors of the industry in the sense that the quaternary sector refers to a part of the third or tertiary sector together with the quinary economic sector.

It has been argued that intellectual services are sufficiently distinct to justify a separate sector and not be considered merely as a part of the tertiary sector. This sector evolves in well-developed countries and requires a highly educated workforce.

In the quaternary sector, companies invest to ensure further expansion. It is seen as a way to generate higher margins or return on investment. Research will be directed at reducing costs, leveraging markets, producing innovative ideas, new production methods, and manufacturing methods, among others.

For many industries, such as the pharmaceutical industry, the quaternary sector is the most valuable, as it creates future branded products that the company will benefit from.

By some definitions, the quaternary sector includes other pure services, such as the entertainment industry.

The quaternary sector is made up of those industries that provide information services, such as computing and information and communication technologies, consultancy (advice to companies) and research, especially in the scientific field.

The quaternary sector is sometimes included in the tertiary sector, since both are service sectors. Among them, the tertiary and quaternary sectors make up the largest part of the UK economy, employing 76% of the workforce.

Theory of the three sectors

The theory of the three sectors postulates that all types of economic activity can be classified in one of the three economic sectors: extraction of raw materials (primary sector), manufacturing (secondary sector) and services (tertiary sector).

According to this theory, each country goes through three phases: initially, as its economy develops, most of its GDP is made from the extraction of raw materials, with only a small part of its economic activity focused on manufacturing and a almost non-existent part focused on services.

As these countries grow, manufacturing becomes the most important element of their economy and, finally, as they mature, almost all of their GDP is derived from services.

Today, most of the GDP of developed countries comes from services (79.7% for the US in 2014, with a world average of 63.6%). This is not simply an empirical observation.

It also makes sense from a theoretical perspective: since each sector builds on what the previous sector has created, it is essential that the former sectors are well developed for the latter to grow.

As competition (a positive function of time) intensifies in older industries, individuals are pushed into markets where competition is less intense. Eventually, competition becomes so fierce that margins are minimized and differentiation is almost non-existent in the first sectors of the economy.

But little by little this is also becoming a reality for the tertiary sector: most of today's services are "mass-produced" and price becomes an increasingly relevant criterion for choosing between two services as quality tends to increase. become uniform.

Eventually, all GDP could be linked to the tertiary sector, making it necessary to find new criteria to segment it and understand the processes through which it is generated. A common and increasingly popular suggestion is to divide the tertiary sector into two distinct categories, creating a "quaternary sector" called the information sector. Today, most of the value is created by "information" services.

This includes, of course, companies like Google and its search engine, but also consultants, professors, analysts, etc., who are paid to provide information to other companies and individuals and support them in making the right decisions.

But this phenomenon is quite new. Not long ago, the service sector was made up almost exclusively of industries such as hotels, restaurants, hair salons, health care, and entertainment. Just as we see a transition from manufacturing to "personal care" services, we could see the same transition to information services.

In the not too distant future, we could have an economy with less than 1% of the workforce working in the first two sectors (because everything would be fully automated) and, perhaps, 19% of the population would work in the quaternary sector.

It will take longer for people to get used to not being served by other human beings, and the remaining 80% of the population will be consultants, analysts, and information software developers (something very likely in this future is that the workforce will become in a very low fraction of the total population).

This development will be done in steps, as has been done for the first two transitions. Initially, only the richest countries will have a high proportion of their population working in the quaternary sector, and the poorest countries will have the majority of their population working in the tertiary sector (as opposed to the current model where rich countries are assumed to are focused on the tertiary sector, and less developed countries on the first two sectors).

The quinary sector constitutes the last economic activity that involves the highest levels of decision-making in a society or economy. Having a quinary economic activity means that you are the top boss and supervise everything.

Examples of this would be the President of a country. Contrary to the consultants who provide recommendations, the population of the quinary sectors takes final actions. Today, it is made up mainly of CEOs, senior government executives, and Heads of State.

But in the future, if the technology is so developed that even the search for information is automated and requires minimal involvement of human beings, then the only people who will be able to create value will be those who can make decisions.

The growth and location of tertiary and quaternary activities

Important points about the tertiary and quaternary sectors:

• These two sectors involve the provision of a wide range of services.
• The tertiary sector grows in importance with economic development, generating employment and economic wealth.
• The quaternary sector is only found in the most economically advanced countries, it is mainly about information and communication and makes use of the latest technology.
• The quaternary sector implies intellectual activity. It does not generate wealth by itself, but it can improve the efficiency of the previous three sectors. You can develop a new fishing method that allows you to catch more tuna using fewer resources, you can develop a new canning method that allows you to sell the tuna at a lower cost, and you can create a new logistics model that makes the distribution of the less expensive tuna. The quinary sector also does not generate wealth, but if the decision makers do their job well, the system should work without any problems for the people who generate wealth.

Results of a country that moves along the path of development:

• It can provide more and better social services, such as schools, medical centers, hospitals and libraries.
• People make more money and have money to spend in stores on basic goods, such as food and clothing.
• After they have bought the basics, people have more disposable income to spend on luxuries such as entertainment, vacations, eating out, and recreation.
• The tastes of the people change and this affects the tertiary sector. For example, cinemas have been closed because many people prefer to watch blueray movies at home.
• New technology creates and enables new services, new services like broadband service providers, website designers, mobile phone networks, software developers, etc.

The global biotechnology industry

Biotechnology is a high-tech industry located in science parks built specifically for the development of this industry. Biotechnology involves the application of sciences such as biology, in fields such as:

• Medical care: Looking for plants with medicinal value, developing new drugs.
• Food production: Development of genetically modified crops and livestock.
• Industrial use of crops: Vegetable oils and biofuels.
• The environment: Recycling, waste treatment and cleaning of contaminated sites.
• War: The development of biological weapons.

Biotechnology is primarily a quaternary activity, as it is primarily research and development and serves all three sectors. The main location factor for this is an adequate number of graduate scientists.

Increase

The recent appearance of the quaternary sector that is the service sector in advanced countries is due to several factors based on economic, social and demographic behavior.

For example, the demographic behavior of Japan shows that the total dependency ratio and the old-age dependency ratio is the highest in the world. Therefore, due to the large number of elderly people, the demand for services, including pension, social insurance and health increases.

Recently, developed economies are dominated by knowledge-intensive services and information services, which require skilled labor. In particular, the growing role of high and medium technology sectors in the modern economy generates demand for knowledge and information services.

Even the demand for skilled labor comes from the traditional sector due to the increasing incorporation of knowledge and some new subsectors, which are made up of fast-growing innovative companies.

There is a particular group of knowledge-based services, which has benefited mainly from technological change and the general increase in demand.

The recent growth of the services sector is due to the growth of the relatively new and fast-growing sectors of knowledge- and information-based services, called the quaternary sector.

In other words, the recent dominant pattern of structural development in the 20th century is characterized by the constant increase in information and knowledge-based services. The general logic behind this process is the information society, or the knowledge-based economy.

Information and knowledge services can directly contribute to economic development through their own growth in employment and income.

They may also have the potential to improve performance in the economic system through knowledge transfer and progressive specialization, which are capable of stimulating various types of competitive advantage and productivity growth: technological innovation, organization, corporate finance, and strategy. and marketing.

Thus, the quaternary sector is the complementary factor of production and raises broad prospects for business discovery and productivity growth.

The quaternary sector has increased its importance in terms of social and economic development in advanced countries mainly due to recent demographic behavior and lifestyle changes, technological changes and, therefore, the growing demand for new services.

Types of industries involved

The high-tech and bio-tech industries are quaternary industries. Quaternary industries are non-basic industries because they generate their money from within the community. Hospitals, for example, serve people who live in local communities.

Advantages and disadvantages

Hospitals as an example of a quaternary industry are a place where people can be investigated and treated. You have unique opportunities to manage chronic diseases, ease societal pressures, and educate patients.

Although local hospitals appear to be a vital social institution, preferred by both patients and staff, they are in danger of disappearing.

This is mainly due to the shortage of adequate medical and nursing personnel, reinforced by the emphasis on highly specialized treatment, which is the current trend in medicine.

This unfortunate trend can result in irreparable damage to the overall provision of health care, which must integrate all physical, psychological and social factors.

Examples of leading international companies in the quaternary sector

In the quaternary sector of the world economy, there are a number of leading international companies that are dedicated to the areas of information and communication technology, research and development of biotechnology, robotics and microelectronics, among others.

In the area of ​​information and communication technologies (ICT), there are multinational corporations such as Apple, Alphabet (Google), Microsoft and Facebook.

While in the biotechnology area, there are large companies such as: Amgen (AMGN), Gilead Sciences (GILD), Biogen (BIIB) and Celgene (CELG). In robotics, the companies Touch Bionics, iRobot and Nothrop Grumann stand out and in microelectronics, there is Analog Devices.

Manzana

This American multinational company is dedicated to the design and production of electronic equipment, software and online services. It is based in Cupertino, California, United States, also has a headquarters in Cork, Ireland.

Its best-known products are the iPhone phone, the iPad tablet, the Mac personal computer, also the iPod, as well as the Apple Watch smart watch and the Apple TV, a digital media player, in addition to various operating systems such as iOS, macOS, watchOS and tvOS, among others.

Alphabet (Google)

In addition to the Google search engine, the Alphabet Inc. corporation, which includes a number of US-owned subsidiaries, specializes in Internet-related products and services, various software and electronic devices.

But it has also dabbled in the field of robotics so it is investing in research and development of robots with multiple uses: autonomous cars, robots that run, jump and walk.

Microsoft

Microsoft Corporation is an American multinational company dedicated to the development of software and hardware. It is based in Washington, United States. In addition to the Microsoft Windows and Microsoft Office operating systems, the company develops and manufactures electronic equipment.

Facebook

It is the largest social network in the world with more than 1,350 million members around the planet and an infrastructure made up of a network of approximately 50,000 servers.

Amgen (AMGN)

This biotechnology company specializes in the development, production and marketing of therapeutic products for the treatment of cancer and other diseases.

Gilead Sciences (GILD)

It also specializes in the area of ​​biotechnology, through the development, production and commercialization in the United States, Europe and Asia of products for the treatment and combat of terminal diseases such as HIV and liver diseases.

Touch Bionics

This giant in the field of robotics creates bionic prostheses that can be operated and controlled through an iPhone or iPod Touch application.

Nothrop Grumann

The company teaches aircraft carrier landing. She is the creator of unmanned aerial vehicles like the X-47B robotic plane. She is currently working on the development of smart drones.

IRobot

It is one of the largest and most recognized companies in the robotics area. He is currently working on the construction of robots capable of coexisting with humans and others for military use.

Analog Devices

In the area of ​​microelectronics there is this American company that manufactures semiconductors.

References

1. Zimmermann, J. (2015). The quaternary sector of the economy. 1-19-2017, from the University of Michigan.
2. Mallick, J. (2015). QUATERNARY SECTOR AND ECONOMIC DEVELOPMENT IN JAPAN. 1-19-2017, from the University of Pardubice.
3. Reference.com. (2016). What activities take place within the quaternary sector of an economy ?. 1-19-2017, from IAC Publishing, LLC.
4. Muscato, C. (2016). Quaternary Industry: Definition & Examples. 1-19-2017, from study.com.
5. World Heritage Encyclopedia. (2002). Quaternary sector of the economy. 1-19-2017, from Project Gutemberg. Khan, B. (2014). Quaternary Sector Industries. 1-19-2017, from Prezi.