Introduction Overview of the task There is a compelling need to highlight the importance of services economy which policy makers and entrepreneurs alike can benefit from, by making use of the economic and business potential in developing the services sector. This is more so in the wake of blurring of boundaries between goods and services. Report purpose and structure In accordance with the above task, this structure of this report is made up of four sections consisting (1) Reasons to build services economy, (2) Sectors impacted by market forces, (3) Future challenges to the services economy and (4) Recommendations. Reasons to build services economy The ICT-enabled automated services help generate incomes from outside of a country’s boundaries. Business people do not have to travel abroad for the purpose. For example, Amazon.com, Dutch G.P.S and Tom Tom are doing business outside their home bases. Such increase in revenues abroad increases the country’s trade balance and growth in productivity. Many countries’ GDP is comprised of share of services by more than 60 %.(Rae, 2010, p 1). Services present a basic economic activity responsible for infrastructure building, enhancing competitiveness, reduction in poverty, job creation and trade facilitation (UNCTAD, 2012, p1). Services sector has the potential to create jobs progressively due to the significant subsectors being labour intensive. As the services sector is skill-based and not investment intensive, it is ideal for countries with scarce capital and educated workforce. It is viewed as an important component of the economy since it involves consumption of new technologies and human capital. Growth in services sector is mainly attributed to rise in per capita income levels of the people. Expansion of employment share in services sector is attributed to lower productivity performance compared to industrial sector (“Baumol’s disease”.) (Muyed, 2008, p 17 ). Sectors impacted by market forces Self-service technology has impacted almost every segment of the service industry replacing the role of traditional workers by consumers themselves. This is due to the advances in information technology which have enabled the leveraging of self-service technology. For example, airline tickets booking, Internet without coming into personal contact with the sellers and mobile phone bank transactions (McManus, 2009,p 17) Liberalised the markets which were the exclusive domain of powerful countries like the U.S., Japan, Germany have now become freely accessible. Deregulation and regulatory reform have adversely impacted software services industry in that the industry is experiencing chronic shortage of skilled manpower locally. Japan and the U.S. experience severe shortage of computer service labour force. This prompts outsourcing of jobs to developing countries thus giving the I.T. industry an international presence (McManus, 2009, p 17). Retail services comprised 9 % of the U.S. GDP in 2008, i.e. 11 $ billion. World retail sales have been estimated at $ 7 trillion and top 200 retail companies comprise 30 % of worldwide demand. Retail sales reflect disposable income of the people. The consumption of household goods has increased by 68 % between 1980 and 2003 (Anand & Nambiar, n.d. p.2 ). Future challeng