ABSTRACT
The progression by which the economy of a given country, or indeed the world, evolves sequentially from a predominance of agriculture to manufacturing, and finally to service activities seems to be a natural and inevitable process. In his seminal work on The Service Economy, Victor Fuchs (1968) demonstrates how the US had undergone a crucial transformation. His calculations reveal that more than half of the US’s aggregate employment and output by the late 1950s came from the service sector, thereby crossing the threshold from a manufacturing to a service economy. Using the definition of a service economy suggested by Fuchs as our paradigm, nearly all the developed country economies have now transitioned into service economies (see Figure 7.1) and the newly industrialized and the developing countries’ economies are at various points along the continuum of transition towards achieving the “Fuchs standard.” 1 The relationship between income level and service development in the mid-2000s. https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203124017/f7d25b62-2f8d-4174-af2f-cd6b2f00e006/content/fig7_1_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> Note: lpercapitagdp is the log form of per capita GDP in US Dollars at constant prices (2000) and constant exchange rates (2000). Source: Original data are online available at https://data.un.org/Explorer.aspx.
