Service Economy, Geography of

Abstract

The producer services supply specialized information to business and government clients. These industries historically are concentrated in large metropolitan areas, although they are also growing rapidly in smaller metropolitan areas. In recent years the geographic distribution of producer services has decentralized among metropolitan regions, and their growth rate is equal in metropolitan and rural areas in the United States. The demand for these services is driven primarily for the need for specialized knowledge, not because clients seek least cost sources of supply. Producer service businesses develop niche market concepts and specialized expertise to attract client demand as they attempt to differentiate themselves from competitors. Advanced information technologies are produced and used by these industries, while work is produced in large measure by face-to-face contact. Markets of producer service businesses vary from being highly localized to global. Their export-market orientation is growing, increasing their contribution to the regional economic base of communities. They also have a growing reliance on the use of specialized services in their production process and collaborate to a growing extent with other service businesses to gain markets.