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"How have services transitioned from the minority to the majority of global GDP? What factors helped propel services ahead of agriculture and manufacturing?



Technology has had a huge impact on every aspect of how people live their lives and do business all around the world. Not long ago having a business ran on computers and or robots was extremely expensive, and rarely seen. Now consumers have robot like devices in their homes. “The digital transformation is affecting the way the economy and societies operate, propelling changes in the scale, scope, and speed of businesses and the structure of markets.” (OECD, 2018) The globalization of advancing technology has even led to lower trade costs, it is easy to see why technology has become the majority of global GDP. Technology has also changed the skill sets in employees as well. Jobs that were once prominent in manufacturing or agriculture have drizzled out due to less demand, or some replaced by some sort of artificial intelligence. However, with the advances in technology other types of jobs have become available. While agriculture is still extremely important, many technologies have taken over the industry. Besides machinery, the use of things like GMOs have taken place of traditional farming methods that were once used. To sum it all up, technology has been able to benefit everyone in some sort of way, and adapting to it, and looking for ways to expand it has been what keeps countries and businesses at the top.

OECD. (2018, 03 19). Achieving Inclusive Growth In The Face of Digital Transformation and the Future of Work. Retrieved from OECD: https://www.oecd.org/g20/OECD_Achieving%20inclusiv...


Economic activity has traditionally been classified into three areas: industry (mining, construction, and manufacturing), agriculture (farming, forestry and fishing) and services (all activities that are not either agriculture or industry). (Johnston 2012). Although agriculture and industry have had a major influence on the GDP, the service industry has begun to grow at a greater rate than both – pushing it from once being the minority to the majority of global GDP.

This has been fueled by both the internet as well as a change in what is needed/desired by consumers and what type of workers are needed to meet the needs of consumers. Prior to WWII, one in three workers were employed in agriculture and manufacturing. Today only one in eight. Where have all the workers gone? (Thompson 2012)

The workers are now employed in the service industry. The service areas which have experienced the most growth are insurance, finance, and real estate. Each of these have doubled their employment share from 10.5 % to 21.4%. Greater growth (13% to 30 %) has also been seen in professional/business services as well as health/education services. (Thompson 2012)

The factors, in addition to advances in information technology – the Internet, which are helping to propel services ahead of agriculture and manufacturing include social changes, government policies, business trends and globalization. Relationships and roles between producers and suppliers are changing as new technological mediums and channels are replacing the traditional means. As businesses continue to grow and expand globally more services will be needed. The service industry will continue to surpass both agriculture and manufacturing at an even greater rate than it does now. (Lovelock 2011).


Johnston, Louis D. (2012, February 22). History lessons: Understanding the decline in manufacturing. MINN POST Retrieved from https://www.minnpost.com/macro-micro-minnesota/2012/02/history-lessons-understanding-decline-manufacturing/

Lovelock, C. & Wirtz, J. (2011). Services Marketing: People, Technology, Strategy (7th ed.). New York: Pearson Education.

Thompson, Derek. (2012 Jan. 26). Where Did All the Workers Go? 60 Years of Economic Change in 1 Graph . The Atlantic. Retrieved on March 20, 2019 from https://www.theatlantic.com/business/archive/2012/...

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Decades ago, the world was divided into the haves, and the have nots, thus creating
inequalities in the market with the minority dominating the business. In the modern world,
various services ...

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