What is the quaternary sector of the economy?

He 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 the people associated with the tertiary sector and the professional in charge of a particular department or section.

The quaternary sector uses tools such as a laptop

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.

It is said that the quaternary economic sector is that of the 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 high management levels. The top management of non-profit organizations, media, arts, culture, higher education, science and technology and government are all included in the quaternary economic sector.

Description of the quaternary sector

The quaternary sector of the economy is one way of describing a part of the knowledge-based economy that normally includes services such as generation and exchange of information, 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 sector or tertiary sector together with the 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 greater expansion. It is seen as a way to generate higher margins or return on investment. The research will focus on reducing costs, taking advantage of markets, producing innovative ideas, new methods of production and methods of manufacture, among others.

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

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

The quaternary sector consists of those industries that provide information services, such as information technology and information and communication technologies, consultancy (consultancy 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 bulk of the UK economy, employing 76% of the labor force.

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 with raw material extraction, with only a small part of its economic activity centered 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 eventually, as they mature, almost the entirety 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 global average of 63.6%). This is not simply an empirical observation.

It also makes sense from a theoretical perspective: since each sector is based on what the previous sector has created, it is essential that the first 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. Finally, the competition becomes so strong that margins are minimized and that differentiation hardly exists in the first sectors of the economy.

But little by little this is also true for the tertiary sector: most of today's services are"mass produced"and price becomes an increasingly important criterion for choosing between two services as quality tends to Uniform

Eventually, all GDP could be linked to the tertiary sector, making it necessary to find new criteria to segment 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, teachers, analysts, etc., who are paid to provide information to other companies and individuals and support them to make the right decisions.

But this phenomenon is quite new. Not long ago, the services sector was composed almost exclusively of industries such as hotels, restaurants, hairdressers, health care and entertainment. Just as we observe a transition from manufacturing to"personal care"services, we might see the same transition to information services.

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

It will take more time for people to become accustomed 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 for the active population to become In a very small 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 concentrated in the tertiary sector, and the least developed countries in the first two sectors).

The quintile sector is the last economic activity involving the highest levels of decision making in a society or economy. Having a quasi-economic activity means that you are the top manager and oversee everything.

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

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

The growth and location of tertiary and quaternary activities

Important points on 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 three previous sectors. A new fishing method can be developed to capture more tuna using less resources, a new canning method can be developed to sell the tuna at a lower cost, and a new logistic model can be created to distribute the tuna. Tuna less expensive. The quintal sector does not generate wealth either, but if decision makers do their work well, the system must work without any problem for people who generate wealth.

Results of a country moving 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 on groceries in commodities like food and clothing.
  • After buying commodities, 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, movie theaters have closed down because many people prefer to watch blueray movies at home.
  • The new technology creates and makes possible new services, new services such as broadband service providers, website designers, mobile phone networks, software programmers, 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 mainly a quaternary activity, since it is mainly research and development and serves the three sectors. The primary locational factor for this is an adequate number of graduate scientists.


The recent emergence of the quaternary sector, which is the services sector in the advanced countries, is due to several factors based on economic, social and demographic behavior.

For example, Japan's demographic behavior 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 insurance increases.

Recently, developed economies are dominated by knowledge-intensive services and information services, which require skilled manpower. 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 formed by fast-growing innovative companies.

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

The recent growth in the services sector is due to the growth of relatively new and rapidly growing sectors of knowledge and information services, known as the quaternary sector.

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

Information and knowledge services can contribute directly 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.

Therefore, the quaternary sector is the complementary factor of production and poses general perspectives for business discovery and productivity growth.

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

Types of industries involved

High technology and biotechnology industries are quaternary industries. Quaternary industries are not basic industries because they generate their money from within the community. Hospitals, for example, provide services to people living in local communities.

Advantages and disadvantages

Hospitals as an example of a quaternary industry are a place where people can be investigated and treated. It has unique opportunities to manage chronic diseases, alleviate social pressures and educate patients. Although local hospitals seem 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 staff, medical and nursing, 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 health care provision, which must integrate all physical, psychological and social factors.


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

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