Service Economy


University of Warwick, UK

DOI: 10.1002/9781118989463.wbeccs206

In a service economy, jobs, trade, and GDP are dominated by services provided through the public, private, and voluntary sectors: for example, retail, hospitality, and tourism; and education, health, and financial services. Even products in manufacturing are now more “servitized,” through marketing services, for example, and many manufacturing companies now seek to add value to their operations through additional financial services.

Certainly, there has been a numerical shift in job types in recent years. In the middle of the twentieth century, manufacturing mattered in what are now called the advanced economies. Almost half of all jobs were in manufacturing, with the rest of jobs shared between services and still very strong primary industries such as mining, agriculture, and fisheries. By the century's end those same economies were dominated by jobs in services. Although there are variations by country, around three-quarters of all jobs are now in services. In some cities, where shopping has replaced shipbuilding and malls have replaced mills, more than four-fifths of jobs are in the service sector. Indeed, many of these so-called “postindustrial” cities in North America and Western Europe have deliberately sought to reinvent themselves as regional service hubs by promoting financial services and tourism.

Some caution is needed about this numerical shift. Long before manufacturing mattered ...

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