Three-sector hypothesis - AbsoluteAstronomy.com

The three-sector hypothesis is an economic

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

hypothesis which divides economies into three sectors of activity: extraction of raw materials (primary

Primary sector of industry

The sector of an economy making direct use of natural resources. This includes agriculture, forestry and fishing, mining, and extraction of oil and gas. This is contrasted with the secondary sector, producing manufactures and other processed goods, and the tertiary sector, producing services...

), manufacturing (secondary

Secondary sector of industry

The secondary sector of the economy or industrial sector includes those economic sectors that create a finished, tangible product: production and construction.-Function:...

), and services (tertiary

Tertiary sector of industry

The tertiary sector of the economy is one of the three economic sectors, the others being the secondary sector and the primary sector .The service sector consists of the "soft" parts of the economy, i.e...

). It was developed by Colin Clark

Colin Clark

Colin Grant Clark was a British and Australian economist and statistician who worked in both the United Kingdom and Australia. He pioneered the use of the gross national product as the basis for studying national economies.-Biography:Colin Clark was born in London in 1905 and was educated at the...

and Jean Fourastié

Jean Fourastié

Jean Fourastié was a French economist, notable for having coined the expression Trente Glorieuses to describe the period of prosperity that France experienced from the end of World War II until the 1973 oil crisis .-Biography:Fourastié received his elementary...

.

According to the hypothesis, the main focus of an economy

Economy

An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

's activity shifts from the primary, through the secondary and finally to the tertiary sector. Fourastié saw the process as essentially positive, and in The Great Hope of the Twentieth Century he writes of the increase in quality of life

Quality of life

The term quality of life is used to evaluate the general well-being of individuals and societies. The term is used in a wide range of contexts, including the fields of international development, healthcare, and politics. Quality of life should not be confused with the concept of standard of...

, social security, blossoming of education and culture, higher level of qualifications, humanisation of work, and avoidance of unemployment

Unemployment

Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

.

Countries with a low per capita income

Per capita income

Per capita income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate and dividing it by the total population...

are in an early state of development; the main part of their national income is achieved through production in the primary sector. Countries in a more advanced state of development, with a medium national income, generate their income mostly in the secondary sector. In highly developed countries with a high income, the tertiary sector dominates the total output of the economy, according to the hypothesis.

Structural transformation according to Fourastié

The distribution of the workforce among the three sectors progresses through different stages as follows, according to Fourastié:

First phase: Traditional civilizations

Workforce quotas:

Primary sector: 70%
Secondary sector: 20%
Tertiary sector: 10%

This phase represents a society which is scientifically not yet very developed, with a negligible use of machine

Machine

A machine manages power to accomplish a task, examples include, a mechanical system, a computing system, an electronic system, and a molecular machine. In common usage, the meaning is that of a device having parts that perform or assist in performing any type of work...

ry. The state of development corresponds to that of European countries in the early Middle Ages

Middle Ages

The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...

, or that of a modern-day developing country

Developing country

A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...

Second phase: Transitional period

Workforce quotas:

Primary sector: 20%
Secondary sector: 50%
Tertiary sector: 30%

More machinery is deployed in the primary sector, which reduces the number of workers needed. As a result, the demand for machinery production in the secondary sector increases. The transitional phase begins with an event which can be identified with industrialisation

Industrialisation

Industrialization is the process of social and economic change that transforms a human group from an agrarian society into an industrial one...

: far-reaching mechanisation (and therefore automation) of manufacture, such as the use of conveyor belt

Conveyor belt

A conveyor belt consists of two or more pulleys, with a continuous loop of material - the conveyor belt - that rotates about them. One or both of the pulleys are powered, moving the belt and the material on the belt forward. The powered pulley is called the drive pulley while the unpowered pulley...

s.

The tertiary sector begins to develop, as do the financial

Finance

"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...

sector and the power of the state.

Third phase: Tertiary civilization

Workforce quotas:

Primary sector: 10%
Secondary sector: 20%
Tertiary sector: 70%

The primary and secondary sectors are increasingly dominated by automation, and the demand for workforce numbers falls in these sectors. It is replaced by the growing demands of the tertiary sector. The situation now corresponds to modern-day industrial societies and the society of the future, the service or post-industrial society

Post-industrial society

If a nation becomes "post-industrial" it passes through, or dodges, a phase of society predominated by a manufacturing-based economy and moves on to a structure of society based on the provision of information, innovation, finance, and services.-Characteristics:...

. Today the tertiary sector has grown to such an enormous size that it is sometimes further divided into an information-based quaternary sector, and even a quinary sector

Quinary sector of the economy

The quinary sector of the economy is defined by some to encompass health, culture, and research.The main categories of industry today include the primary, secondary and tertiary sectors. The quinary sector could be seen as a further division of the tertiary sector, which is a part of the economy...

based on non-profit services.

Structural transformation according to Fourastié

First phase: Traditional civilizations

Second phase: Transitional period

Third phase: Tertiary civilization

See also

Further reading