6 The Services Shift: Policy Implications

In most countries today, services account for the largest share of economic activity. In the United States, for example, services account for 67 percent of both GDP and employment if we exclude government from our definition of “service,” and fully 80 percent of GDP and 83 percent of employment if we include government. These are staggering figures, from almost any perspective. And because the manufacturing sector itself has a steadily growing component of services—such as R&D, design, logistics, marketing, and servicing—even these huge percentages tend to understate the importance of services.

So the policy implications that grow out of the expanding globalization of services are both far ranging ...

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