ABSTRACT
Grounded in economic base theory, which assumes that any economy must earn external income in order to grow, conventional economic development theory and practice discriminate between ‘basic’ activities, which generate such external income and thus act as engines of growth, and ‘dependent’ activities, which merely circulate income within a particular economy. In consequence, the principal focus of local economic development has been on cultivating the basic sector, traditionally believed to be composed of primary and secondary activities. A major achievement of the vast array of service-sector studies conducted over the past decade or so, however, has been to redefine producer services as basicsector activities and thus motors of local economic development. The old ‘manufacturing as engine of growth’ and ‘services as dependent activity’ dualism has been largely replaced by a ‘manufacturing and producer services as motors of development’ versus ‘consumer services as parasitic’ dichotomy.
