Business Services

Business services are a broad range of industry sectors that support the operations, infrastructure and productivity of companies. They include everything from IT, finance and marketing to HR, shipping, and procurement. Companies in the business services sector may also provide consulting and advice, or offer outsourcing or staffing solutions.

Companies in the business services sector generally have low barriers to entry and can often start up with relatively little capital investment. This makes the industry competitive and often prone to price wars. In addition, many businesses providing business support services operate on small margins and thus face high pressure to maintain profit.

The business services industry is characterized by five attributes: intangibility, inseparability, scalability, customer involvement and interdependency. These attributes allow business services to be differentiated from other activities, such as manufacturing or retailing, which produce tangible products. Business services are a critical component of the economy in many countries, with some sectors, such as cleaning and waste management, contributing more than 50% to GDP.

In the EU, the business service industry accounts for more than 11% of GDP and has significant untapped potential for growth. Despite facing lower average productivity and persisting legal barriers, new EU Internal Market legislation and policy actions aim to remove obstacles and promote competition in the sector. In recent years, startups have sprung up across the world with ideas and business solutions that are innovative, flexible, and sustainable. They are aided by new communication technologies and infrastructure, which enable them to reach customers more easily and quickly.