Types of Economies &

Characteristics
Group 4
Sai Nishanth(BLBU.P2MBA20031)
Sahithi (BLBU.P2MBA20058)
Sundara Kannan(BLBU.P2MBA20042)
Vishnu Sankar(BLBU.P2MBA20051)
Ashish(BLBU.P2MBA20024)
Agenda
•To understand the evolution of the economy
•To understand the different types of economies and their characteristics along with some
examples.
•To understand role of services and shared services in the economy
Economic Evolution
•During 1900s(Pre Industrial) 3 out of 10 workers were employed in service sector

•During 1950s(Industrial) 5 out of 10 workers were employed in service sector

•At present(Post Industrial), 8 out of 10 workers are employed in service sector

Trends in US employment by sector
Stages of economic activity
•Primary (Extractive)
•Secondary (Goods Producing)
•Tertiary (Domestic services)
•Quaternary (Trade and commerce)
•Quinary (Extending Human potential)
Main Types of Economies
•Agrarian Economy
•Industrial Economy
•Service Economy
•Shared Economy
Agrarian economy
•Mostly based on agriculture
•Based on man power(raw muscle) and no signs of
technology
•Low productivity
•Use of simple hand tools
•Use of natural resources for income
•Structured around traditional and routine authorities
•Defines standard of living is measured by
“Subsistence”
Industrial economy
•Focuses on production of goods
•Use of machines and man power to tend the
machinery
•Semi skilled workers
•Focus on efficiency, awareness of value of time
•Bureaucratic and hierarchical structures
•Storage of products in inventories for later use
•Defines standard of living by the quality of goods
Service economy
•Information is a key resource
•Creative intelligence is key
•Services are rendered on-demand, leading to no
inventory
•Professional and technically skilled workers with
formal education
•Independent actions of individual has an impact
on the society
•Increase in family income leads to enriched life
• Defines standard of living in terms of quality of
education, health and recreation
Comparison of Economies
Shared economy
•Technology facilitates access of goods or services
between 2 or more parties
•Value exchange occurs through a shared
marketplace, collaborative platforms and peer-
to-peer applications
•Lack of overhead inventory helps shared
businesses to run lean
•Examples:
• Transportation : Uber, Ola
• Consumer goods: e-Bay, Amazon, Flipkart
• Hospitality : Airbnb, Oyo
• Food : Swiggy, Zomato
• Healthcare and Pharmaceutical : Practo, Pharmeasy
Service Economy Characteristics
Simultaneity: Delivering the service
and Receiving the service are done at
the same time.
◦ Example: Grooming

Perishability: The inability to store a

service for later use
◦ Example: Room not booked in a hotel
cannot be used the next day
Intangibility: The services rendered are not visible but
the effects of the service are felt by the consumer.
◦ Example: Consulting

Heterogeneity: Services can be customized based on

specific consumer needs
◦ Example: Dining

Customer participation in the service process:

Involvement of customers for their service to be
rendered.
◦ Example: Hospitals and Healthcare
Key Takeaways
•Evolution of economy from pre industrial era to present shared economy.
•Modern economies are dominated by employment in service sector
•Nature of service economy is moving from transactional to experience based relationship
•Shared economies are becoming the trend due to reduced expenses in inventory