chapter  1
Producer services and China’s economic and urban development: Introduction and overview
Pages 24

Introduction Producer services, due to their manifest importance in the context of local, regional, and national economies, are seen as “the glue that holds any economy together, the industries that facilitate all economic transactions, and the driving force that stimulates the production of goods” (Riddle 1986: 26). Over the past several decades, with the alteration of the “regime of accumulation” in capitalist development, i.e. the shift from Fordism to post-Fordism, producer services have expanded rapidly. These activities not only represent an important sector for output and employment generation in most developed countries, but also play a key role in facilitating overall economic change and adjustment (Coffey et al. 1996). Service activities for a long time were regarded as induced and “parasitic” activities with a passive or dependent role in regional development because they are “intangible,” “non-tradable,” and “unproductive” (Cohen and Zysman 1987; Peck and Tickell 1991). The principal engine of regional development was the goods-producing sectors which constituted the “basic activities” of the economic base of an area (Eatwell 1982). This negative perception of service activities has come to be increasingly questioned with the rapid growth of producer services, accompanied by the deindustrialization process – the stagnation or decline in manufacturing employment – in many developed economies since the 1970s (Singh 1989; Begg 1993). As the central activities in the post-Fordist society, producer services have not only modified the traditional economic base model, but also ushered in a new phase of regional economic development.