ABSTRACT
Economic activities have been traditionally divided into primary, secondary and tertiary activities. In certain theories, either primary or secondary activities, or both, were seen as productive, others as less productive. The Physiocrats in France, for example, believed that land was the only source of value. Ricardo (and Karl Marx) ascribed such a role to labour. Services were long believed to be an unproductive and undesirable source of employment and an arcane area of economic activity. The result is that the service sector has been a neglected area in research and policy debates. In the last decade or two, however, the crucial importance of services to the economy has been increasingly recognized. One reason is the growing importance of services in national economies. The services’ share in employment and GNP has grown in almost all countries in the last two decades (Shelp 1981, 1983; Daniels 1982; Gershuny and Miles 1983; Kravis et al. 1983; Riddle 1986); services account for about two-thirds of GDP in the developed countries and for almost half of GDP in developing countries (World Bank 1989). Another reason is the growing international trade in services (Leveson 1985; Giarini 1987).
