The business services industry comprises all intangible and non-financial services that companies use in the course of their operations. This includes consulting, marketing, advertising, logistics (including travel and facilities services), waste handling, staffing services, shipping, administration and security. It is a vital aspect of the economy and acts as the backbone for numerous industries, including IT, banking, insurance and transport.
As a sector, it has grown rapidly in recent years and has been driven in part by the COVID-19 pandemic, which saw organisations outsourcing many of their functions to service providers. In addition, new communication technologies have made it possible for people to work remotely and from anywhere with an internet connection, boosting demand for this type of service.
Unlike tangible products such as goods, services are intangible and cannot be stored to be used at a later date. They are produced and consumed simultaneously, making the experience of using them very different from that of buying a physical product. This intangibility also means that customers do not play as big a role as they do with the procurement of goods and services. Their input into operational processes can affect the quality of service delivered – for example, a customer dithering at a fast food counter makes it harder for everyone behind him to get served quickly.
This makes it an important and highly competitive sector, providing jobs for a large number of people. It is also a sector in which businesses are increasingly using innovative ways to improve their competitiveness through new combinations of services. For example, an architectural firm may offer virtual services such as design and modeling of a building or an IT company can provide its software and IT solutions as a service.