PROSPECTIVE: Towards the Quaternary Sector in 2040
[Article written on April 18, 2023 by Jeremy Lamri with the support of the Open AI GPT-4 algorithm for about 30%. All images were generated with Adobe Firefly].
Imagine a future where knowledge and innovation are drivers of prosperity. This world, shaped by the quaternary sector, might become our reality. At the heart of the economic, environmental, and social revolutions we are undergoing, knowledge-based economies, demographic changes, globalization, and environmental responsibility are gradually converging. In this context, the quaternary sector embodies not only the future of the economy but also our ability to meet the challenges and seize the opportunities that present themselves to us in the 21st century and beyond. Dive into an alien concept that deserves more attention.
What is the Quaternary Sector?
The quaternary sector encompasses a wide range of economic activities related to the production, management, and distribution of knowledge, information, and high-value-added services, as well as societal contribution.
This sector is characterized by the importance of research, development, and innovation (R&D), the use of information and communication technologies (ICT), and activities aimed at improving the quality of life, social cohesion, and sustainable development. Societal contributions, such as support for the elderly, preservation of the environment, and citizenship education, are an integral part of this sector.
While sectors as we know them (primary, secondary, tertiary) were theorized in the 1930s, it wasn’t until the 1970s that the concept of the quaternary sector began to be developed and discussed. The British economist Sir Arthur Lewis, in his work “Growth and Fluctuations, 1870–1913” (1978), introduces the term “quaternary sector” to describe economic activities that do not fall under the three traditional sectors. Lewis highlights the growing importance of activities related to research, education, and information management.
Simultaneously, the French economist Jean Fourastié, in his book “Les Trente Glorieuses”, also discusses the emergence of a quaternary sector in 1979. Fourastié highlights the evolution of the economy towards increasingly specialized and knowledge-based, research, and development activities.
In the 1980s and 1990s, the concept of the quaternary sector was expanded by economists such as Daniel Bell and Peter Drucker. Bell, in his work “The Coming of Post-Industrial Society” (1973), argues that the post-industrial society will be dominated by services and knowledge production. Similarly, Drucker, in “The Age of Discontinuity” (1969) and “The Post-Capitalist Society” (1993), points to the importance of knowledge and information as drivers of economic growth.
It was not until the 2000s that societal activities (support for the elderly, preservation of the environment, citizenship education, etc.) were naturally associated with the quaternary sector, notably thanks to the development of the social and solidarity economy (SSE), and the growing awareness of the importance of corporate social responsibility (CSR).
Economists and researchers studying SSE and CSR further contribute to broadening the understanding of the role of businesses and organizations in society, emphasizing the creation of social and environmental value in addition to economic value. Among the most emblematic on these subjects, we can mention Amartya Sen, Elinor Ostrom, Muhammad Yunnus, or Michael Porter, who profoundly revisited his theory of ‘shareholder’s value’ in light of long-term societal issues.
Why is the Quaternary Sector Inevitable?
The quaternary sector is considered inevitable due to several factors related to economic, technological, and social development. We can list at least 7 reasons why this sector has become an essential and unavoidable part of the modern economy and will continue to be so in the future:
1 — Mass Unemployment
Mass unemployment in 2040 could be exacerbated by factors such as the automation of traditional jobs, globalization and increased offshoring, and the skill gap favored by the too rapid evolution of technologies and industries. This reason alone is enough to find an alternative economic model to traditional employment.
2 — Growth of Knowledge-Based Economies
The growth of knowledge-based economies is one of the key factors that make the quaternary sector inevitable. As the global economies evolve and traditional industries such as agriculture, manufacturing, and basic services transform, the creation, management, and distribution of knowledge and information become increasingly important. The competitiveness and prosperity of nations now depend more on their ability to innovate and generate new ideas, products, and services.
In this context, the quaternary sector, which embraces these knowledge-related activities, is essential for economic development. Economies that manage to position themselves as leaders in the fields of research, development, innovation, and information management are the ones that will experience sustainable growth and long-term prosperity. Investments in education, training, technological infrastructure, and research are therefore crucial to support the quaternary sector and ensure future economic success.
Moreover, knowledge-based economies value the skills and talents of individuals, leading to increased demand for highly skilled and specialized professions. The quaternary sector offers employment opportunities for researchers, teachers, engineers, consultants, health professionals, and many others. These jobs often require advanced training and expertise, thus contributing to a more robust and resilient economy.
3 — Technological Advancements
Over the past decades, rapid and exponential advances in computer science, the internet, smartphones, and other digital technologies have revolutionized how individuals and organizations access, process, and share information. These advances have transformed almost all aspects of daily and professional life, facilitating communication, collaboration, and the exchange of knowledge on a global scale.
ICTs have had a significant impact on research, development, and innovation (R&D) in various fields, such as health, energy, the environment, and education. Researchers and innovators can now benefit from unprecedented access to data, tools, and collaborative networks, facilitating the discovery of new solutions to address the complex challenges societies face today.
Technological advances have also allowed for the creation of new innovative services and products that are specific to the quaternary sector. For example, digital platforms and mobile apps have revolutionized how consumers access financial, educational, health, and entertainment services, to name just a few.
4 — Globalization and Interconnectivity
The globalization and increasing interconnectivity of economies and societies have led to increased demand for services and activities related to the quaternary sector. Indeed, organizations must now collaborate and exchange information globally to remain competitive. This reality requires infrastructure and skills unique to the quaternary sector.
The interconnectivity of economies also facilitates the rapid diffusion of innovations and knowledge around the world, stimulating economic growth and creating new opportunities for businesses and individuals. Besides, globalization provides access to larger and diversified markets, allowing quaternary sector companies to expand their operations and offer services tailored to the specific needs of customers around the globe.
Increased competition between businesses and countries, promoting economic players to invest more in research, development, and innovation to stand out and remain competitive, should also be considered. Thus, globalization and interconnectivity play a key role in strengthening the quaternary sector by promoting the dissemination of knowledge, innovation, and international collaboration.
5 — Demographic and Social Changes
Population aging is a major issue for many developed and developing countries. With increased life expectancy and declining birth rates, the proportion of older people in the population is increasing. This results in increased demand for specific services such as health care, home services, and retirement programs tailored to the needs of the elderly. The quaternary sector can meet these needs with innovation in health, wellness, and quality-of-life sectors.
Urbanization is another demographic and social challenge. More and more people are moving to urban areas for work, educational opportunities, and a better quality of life. This creates a growing demand for efficient and sustainable urban services such as mobility, housing, energy, and infrastructure. The quaternary sector is essential for developing and implementing smart and sustainable solutions to meet these growing urban needs.
Migration is also a demographic and social issue that requires innovative and tailored solutions. Population movements across national and international borders create challenges in terms of integration, education, housing, and employment for migrants and host communities. The quaternary sector plays a crucial role in developing policies, programs, and services that facilitate the integration of migrants and contribute to social cohesion.
Finally, social and economic inequalities are another challenge that requires the intervention of the quaternary sector. Disparities in education, income, health, and professional opportunities can have harmful effects on social cohesion and economic development. The quaternary sector allows for the development of innovative solutions and adapted services to reduce these inequalities and promote social equity.
6 — Environmental Responsibility and Sustainable Development
The increasing awareness of environmental issues and the need for sustainable development have led to a growing demand for environmentally friendly products, services, and technologies. In this context, research is focusing on areas such as renewable energy sources, energy efficiency, reducing greenhouse gas emissions, and preserving biodiversity.
Furthermore, companies and organizations in the quaternary sector are striving to develop and promote sustainable business practices, such as circular economy, corporate social responsibility, and ecologically responsible production. These practices aim to minimize the environmental impact of economic activities and promote sustainable development.
Also, the quaternary sector plays a key role in disseminating and raising awareness of environmental issues and sustainable solutions. Environmental education, training, and communication activities contribute to informing citizens, businesses, and policymakers about environmental issues and the measures they can take to mitigate them.
7 — Evolving Consumer Expectations
Modern consumers demand increasingly personalized and tailored products and services. They are in search of a customised experience and added value that goes beyond tangible goods. The quaternary sector is capable of meeting these expectations due to its focus on innovation, personalization, and the creation of high-quality services.
This includes services such as personalized education, custom health care, and the creation of products catered to individual customer needs. Companies and organizations in the quaternary sector invest in research and development to understand customer needs and create innovative solutions to meet these needs.
In this context, quaternary sector companies also seek to establish long-term relationships with their customers by offering superior quality services, responding quickly to requests, and adapting to market changes. The emphasis on customization and meeting consumer needs helps strengthen the position of the quaternary sector in the economy and make it indispensable to meeting changing consumer expectations.
How to support the emergence of the quaternary sector?
In a context where there may not be work for everyone by 2040, it is essential to find solutions to ensure that every person can live a dignified life. Several potentially complementary options could be considered:
The contributory universal income
The establishment of a universal basic income would guarantee each individual a minimum income to meet their basic needs, regardless of their professional status. In the context of the quaternary sector, it could offer an innovative approach to recognize and value societal contributions, ensure a decent income for all, and encourage active participation in society. This approach would require political will and a commitment to rethink current economic models and invest in training and education to support the transition to an economy focused on the quaternary sector.
Such an initiative could be funded by various sources, such as taxation, wealth redistribution, public-private partnerships, and revenues generated by quaternary sector activities. Innovative financing mechanisms could also be explored, such as creating a social currency or a social credit system based on contributions to the quaternary sector. By combining different mechanisms and models, it is possible to completely rethink the link between public and private, and between work and civic engagement.
Reducing work hours
Reducing work hours in the quaternary sector could be considered as a solution to challenges posed by technological advances, increased productivity, and growing demand for a better quality of life. By implementing appropriate work policies and practices, it is possible to create a more balanced, sustainable, and equitable work environment for quaternary sector employees.
The nature of quaternary sector activities often allows for greater flexibility in work organization. Flexible working hours, teleworking, and part-time work models can facilitate the implementation of reduced work time while maintaining productivity and a good level of satisfaction. This should contribute to a better balance between work, leisure, and civic engagement.
Promoting the social and solidarity economy
The development of the social and solidarity economy, which prioritizes social and environmental objectives over profit, could offer new employment opportunities and encourage civic involvement. The promotion of the SSE in the quaternary sector requires ongoing investment in innovation and research. SSE organizations must be encouraged to develop new products, services, and economic models to meet social and environmental needs.
Research institutions and universities can play a key role in supporting and disseminating knowledge about the SSE.
SSE organizations must collaborate with other quaternary sector players, such as businesses, research institutions, and governments, to share resources, knowledge, and skills. The creation of networks and collaboration platforms can facilitate these partnerships and strengthen the innovative potential and social impact of the SSE.
Lifelong learning and education
The emphasis on education and continuing training would allow individuals to adapt to changes in the job market and acquire new skills to contribute meaningfully to society. This involves making learning accessible, flexible, learner-centered, and adapted to the changing needs of the job market and society. By emphasizing interdisciplinary learning, partnership building, and recognition of achievements, the quaternary sector can support the development of the necessary skills and knowledge to meet the challenges of the 21st century and beyond.
Such an approach requires the personalization of learning paths, adaptation of teaching methods, and evaluation of skills to help learners reach their professional and personal goals, which is far from currently being the case. Above all, the quaternary sector is characterized by a fast pace of innovation and change. Therefore, lifelong learning and education must focus on updating and adapting individuals’ skills to prepare them for the jobs of tomorrow and enable them to thrive in a constantly changing environment.
Valuing volunteering and societal contributions
It’s the elephant in the room, but it’s probably the only real way to create a more inclusive, supportive, and sustainable society. Through policies and practices that encourage and support citizen engagement, we can strengthen the role of the quaternary sector in promoting individual and collective well-being and creating a better future for all. Employers could encourage and support volunteering among their employees by offering paid leave for volunteering activities, supporting corporate volunteering programs, or recognizing skills gained through volunteering in performance evaluations and promotions.
To support and value societal contributions, partnerships between public, private, and non-profit sectors could be developed. These partnerships could include funding for volunteer projects, the creation of platforms connecting volunteers and organizations, and promoting a culture of volunteering and citizen engagement. Education programs could incorporate volunteering and societal activities as key elements of the curriculum, encouraging students to participate in community projects and develop active citizenship skills. Furthermore, educational institutions could recognize and value volunteering experiences in their admission and evaluation processes.
Conclusion
It is now undeniable that the quaternary sector encompasses an essential and inevitable dimension of the modern and future economy. In the face of global challenges such as knowledge-based economy growth, technological advances, demographic changes, globalization, and social and environmental issues, it is urgent and necessary to formalize the quaternary sector and develop a viable economic model that fully recognizes and values its contributions.
The inclusion of societal activities such as elderly care, environmental preservation, and citizenship training in the quaternary sector underscores the importance of creating an economic model that goes beyond simple financial value creation. Such a model should take into account social and environmental impacts and promote sustainable and inclusive economic growth that benefits society as a whole.
It is therefore crucial for policymakers, economists, researchers, and businesses to work together to formalize and support the quaternary sector. This involves recognizing and valuing societal contributions, developing favorable public policies, investing in research and innovation, and promoting a social and solidarity economy.
By establishing a viable economic model for the quaternary sector, we can meet the challenges of our time and create a more prosperous, sustainable, and equitable future for all. The time has come to act and seize the opportunities offered by the quaternary sector to shape the economy of tomorrow and ensure the well-being of present and future generations. As politicians and citizens clash over the details of future pensions, it is time to think about what work and employment will really mean in this future.
Bibliography
Bell, D. (1973). The Coming of Post-Industrial Society: A Venture in Social Forecasting. Basic Books.
Drucker, P. F. (1969). The Age of Discontinuity: Guidelines to Our Changing Society. Harper & Row.
Drucker, P. F. (1993). Post-Capitalist Society. HarperCollins Publishers.
Fourastié, J. (1979). Les Trente Glorieuses, ou la révolution invisible de 1946 à 1975. Éditions Fayard.
Lewis, W. A. (1978). Growth and Fluctuations, 1870–1913. London: George Allen & Unwin.
Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press.
Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value. Harvard Business Review, 89(1–2), 62–77.
Sen, A. (1999). Development as Freedom. Oxford University Press.
Yunus, M., Moingeon, B., & Lehmann-Ortega, L. (2010). Building Social Business Models: Lessons from the Grameen Experience. Long Range Planning, 43(2–3), 308–325.
[Article written on April 18, 2023 by Jeremy Lamri with the support of the Open AI GPT-4 algorithm for about 30%].
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