Quaternary Sector of the Economy: Definition and Examples

The quaternary sector of the economy is an extension of the tertiary, i.e., the service sector. It is also known as the knowledge sector.

Quaternary sector examples include fund managers, consultants, software developers, statisticians, office personnel, school and university personnel, theaters, doctors, accountants, bankers, and media personnel.

This sector is concerned with information-based or knowledge-oriented products and services. It comprises both private and governmental services. Industries and activities in this sector include information systems, information technology, research, financial analysis, strategic analysis, consulting, education services, designing, blogging, and many more.

Activities in this sector are generally a greater part of the economy in developed than developing countries.

What are the Five Sectors of the Economy?

Economic activity can be divided into five main sectors, outlined below.

These sectors are known as the primary sector (raw materials), the secondary sector (manufacturing), the tertiary sector (services), the quaternary sector (information services), and the quinary sector (human services) (Clark, 1940; Kuznets, 1966).

The quaternary and the quinary sectors are considered extensions of the tertiary sector. Each plays a vital role in the economy.

• The primary sector involves the extraction and production of raw materials. Examples include farming, mining, fishing, logging, and so on.
• The secondary sector involves the transformation of raw or intermediate materials into goods. Examples include the production of clothing with textiles, bottles with glass, cars with steel, and so on.
• The tertiary sector involves the supplying of services to consumers and businesses. Examples include accounting, retail, baking, babysitting, and so on.
• The quaternary sector is an extension of the tertiary sector and includes information or knowledge-based services. Examples include research, media, consultation, education, blogging, etc.
• The quinary sector is an extension of the tertiary sector with varying definitions. It is often thought of as the sector responsible for services provided by the highest levels of organization in society, including services such as government, military, education, and healthcare.

Quaternary Sector Examples

• Mass media – An array of media technologies that reach a large audience via mass communication.
• Telecommunications – The transmission of information over wire, radio, optical, or other electromagnetic systems.
• Information technology – The use of computers to create, process, store, retrieve, and exchange any kind of information. IT is generally used within the context of business operations.
• Consulting – Services that provide professional advice to the public or to those practicing the profession on how to modify or proceed in a given process within that field.
• Education – Activities directed at transmitting knowledge or fostering skills and character traits. Education can be formal, non-formal, or informational.
• Financial services – Economic services provided by the finance industry. These services include banking, insurance, accounting, and investment management.
• Professional services – Services that require special training. Examples include lawyers, architects, accountants, engineers, doctors, and teachers.
• Information systems – An information system is a set of components for collecting, storing, and processing data and information. Information systems provide knowledge and digital products.
• Real estate – Services that provide the opportunity to purchase property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.
• Retail – The sale of goods and services to consumers. A retailer buys goods in large quantities from manufacturers and then sells in smaller quantities to consumers for a profit. Retailers are the final link in the supply chain from producers to consumers.
• Healthcare – A category of services that includes medicine, optometry, dentistry, pharmacy, nursing, psychology, athletic training, and many more.
• Public health – the science of preventing disease and harm through the organized efforts and informed choices of society.
• The entertainment industry – Also known as show business, this includes many sub-industries that are devoted to entertainment. Examples include theater, film, music, television, radio, and so on.
• Robotics – An interdisciplinary branch of computer science and engineering that involves the provision of services that require the use of robots.
• 3D printing – Also known as additive manufacturing, these services provide a way for the customer to construct a three-dimensional object from a digital model.

Top Quaternary Sector Industries

1. Professional Services

Definitions of what counts as a professional service differ significantly. Commonly cited examples include accounting, law, management consulting, engineering, advertising, architecture, investment banking, marketing, insurance, software development, and many more.

Therefore, the link between these examples is that all of these services require particular expertise or a particular knowledge base (von Nordenflycht, 2010, p. 156).

The distinctiveness of professional services can come from three sources: knowledge intensity, low capital intensity, and a professionalized workforce (von Nordenflycht, 2010, p. 170).

Other definitions consider that low capital intensity is not a necessary condition for something to be considered a professional service. Regardless of which common definition we use, all professional services are knowledge-based and information-oriented. They are, therefore, part of the quaternary sector of the economy.

2. Education Industry

The education industry includes all organizations and businesses that provide products and services aimed at sharing knowledge or fostering skills and character traits.

The education industry includes schools, colleges, universities, and related private institutions. Education is considered a prime responsibility of public policy.

The right to education has been recognized as a human right in several international conventions (United Nations, 1966).

Any service that involves teaching is part of the education industry. Since teaching, in general, is knowledge-based and information-oriented, all services provided by the education industry are part of the quaternary sector of the economy.

3. Mass Media

Mass media refers to media technologies that reach a large audience via mass communication.

This includes broadcast media such as films, radio, recorded music, or television, as well as digital media such as the internet and mobile mass communication. This website is itself a mass media service.

All mass media services, including broadcast media and digital media, provide information. They are, therefore, part of the quaternary and, by extension, the tertiary sector of the economy.

4. Information Technology

The use of computers to create, process, store, retrieve, and exchange any kind of information and data.

Information technology is part of ICT (Information and communications technology). The first definition of information technology consisted of three categories: techniques for processing, the application of statistical and mathematical methods to decision-making, and the simulation of higher-order thinking through computer programs (Leavitt & Whisler, 1958, p. 11).

Several knowledge-based and information-oriented services are considered part of information technology. Examples include software, the internet, and e-commerce. All such services are part of the quaternary sector of the economy.

5. Public Health

Public health is the “science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals” (Winslow, 1920).

Public health plays a vital role in disease prevention across the globe. Despite the fact that most governments recognize the importance of these services, they generally used to receive significantly less funding compared to medicine (Gatseva & Argirova, 2011).

Analysis of the health threats a population might face is the basis of public health. The term ‘public’ might mean a group as small as a village or as large as the entire world in case of a pandemic.

The concept of ‘health’ encompasses physical, psychological, and social well-being. Public health services are all part of the quaternary and, by extension, the tertiary sector of the economy. Public health is part of the quaternary sector because it is knowledge-based.

Conclusion

Economic activities are traditionally grouped into three categories. These are the primary, secondary, and tertiary sectors.

Two additional economic sectors are considered extensions of the tertiary sector: the quaternary and the quinary sectors. The quaternary sector is the branch of the tertiary sector that is concerned with services based on knowledge or information.

References

Clark, C. (1940). The Conditions of Economic Progress. Macmillan.

Gatseva, P. D., & Argirova, M. (2011). Public health: The science of promoting health. Journal of Public Health, 19(3), 205–206. https://doi.org/10.1007/s10389-011-0412-8

United Nations (1966). International Covenant on Economic, Social and Cultural Rights. Retrieved from: https://treaties.un.org/doc/Publication/MTDSG/Volume%20I/Chapter%20IV/IV-3.en.pdf

Kuznets, S. (1966). Modern Economic Growth. New Haven: Yale University Press.

Leavitt, H. J., & Whisler, T. L. (1958). Management in the 1980s. Cambridge: Harvard Business Review.

von Nordenflycht, A. (2010). What Is a Professional Service Firm? Toward a Theory and Taxonomy of Knowledge-Intensive Firms. The Academy of Management Review, 35(1), 155–174.

Winslow, C.-E. A. (1920). The untilled fields of public health. Science 51(23).