chapter  6
Service Industries in the Rural Economy: The Role and Potential Contributions
WithStephen M. Smith
Pages 22

Service industries long have been the major growth sector in the national economy and are projected to continue as such. The explosion in communications and information technology and the continually increasing demand for more and more sophisticated information make services very attractive. If services are to replace traditional rural employment sources, they must export to nonlocal markets, and particularly to out-of-state and metropolitan markets. Research shows that changes in business practices and in the production function of the economy better explain the growth in producer services firms and employment. The broad trends of service sector growth have been similar in nonmetro areas, but with interesting differences between time periods. From 1975 to 1989, percent of the net employment growth in nonmetropolitan counties was in service-producing industries. The potential importance of services to the future of rural economies took on added importance in the 1980s as employment declined in the traditional rural extractive and manufacturing industries.