The three-sector model in economics divides economies into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary), and services (tertiary). According to the model, the main focus of an economy's activity shifts from the primary, through the secondary and finally to the tertiary sector. Countries with a low per capita income 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. The model was developed by Allan Fisher, Colin Clark, and Jean Fourastié.
Primary sector: raw materials
Secondary sector: manufacturing
Tertiary sector: services
Quaternary sector: information services
Quinary sector: human services
|AGB Fisher · Colin Clark · Jean Fourastié|
|Sectors by ownership|
|Business sector · Private sector · Public sector · Voluntary sector|
Structural transformation according to Fourastié
Fourastié saw the process as essentially positive, and in The Great Hope of the Twentieth Century he wrote of the increase in quality of life, social security, blossoming of education and culture, higher level of qualifications, humanisation of work, and avoidance of unemployment. The distribution of the workforce among the three sectors progresses through different stages as follows, according to Fourastié:
First phase: Traditional civilizations
- Primary sector: 64.5%
- Secondary sector: 20%
- Tertiary sector: 15.5%
This phase represents a society which is scientifically not yet very developed, with a negligible use of machinery. The state of development corresponds to that of European countries in the early Middle Ages, or that of a modern-day developing country.
Second phase: Transitional period
- Primary sector: 40%
- Secondary sector: 40%
- Tertiary sector: 20%
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 way or phase begins with an event which can be identified with the industrialisation: far-reaching mechanisation (and therefore automation) of manufacture, such as the use of conveyor belts.
The tertiary sector begins to develop, as do the financial sector and the power of the state.
Third phase: Tertiary civilization
- 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. 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 based on human services.
Extensions to the three-sector model
The quaternary sector comprises mainly intellectual activities and knowledge based activities aimed at future growth and development. Activities include scientific research, education, consulting, information management and financial planning.
Sometimes referred to as ‘gold collar’ professions, they represent another subdivision of the tertiary sector representing special and highly paid skills of senior business executives, government officials, research scientists, financial and legal consultants, etc. The highest level of decision makers or policy makers perform quinary activities.
- Kjeldsen-Kragh, Søren (2007). The Role of Agriculture in Economic Development: The Lessons of History. Copenhagen Business School Press DK. p. 73. ISBN 978-87-630-0194-6.
- Fisher, Allan G. B. (1935). The Clash of Progress and Security. London: Macmillan. Retrieved 2019-07-13.
- Fisher, Allan G. B. (1939). "Production, primary, secondary and tertiary". Economic Record. 15 (1): 24–38. doi:10.1111/j.1475-4932.1939.tb01015.x. ISSN 1475-4932.
- Fisher, Allan G. B. (1946). Economic Progress And Social Security. London: Macmillan. Retrieved 2019-07-14.
- Colin Clark (1940). The Conditions of Economic Progress. London: Macmillan. Retrieved 2019-07-13.
- Fourastié, Jean (1949). Le grand espoir du XXe siècle: Progrès technique, progrès économique, progrès social. Paris: Presses universitaires de France.
- Kellerman, Aharon (1985-05-01). "The evolution of service economies: A geographical perspective 1". The Professional Geographer. 37 (2): 133–143. doi:10.1111/j.0033-0124.1985.00133.x. ISSN 0033-0124.
- "Sectors of Economy: Primary, Secondary, Tertiary, Quaternary and Quinary". 2014-10-05.
- Bernhard Schäfers: Sozialstruktur und sozialer Wandel in Deutschland. ("Social Structure and Social Change in Germany") Lucius und Lucius, Stuttgart 7th edition 2002
- Clark, Colin (1940) Conditions of Economic Progress
- Fisher, Allan GB. Production, primary, secondary and tertiary. Economic Record 15.1 (1939): 24-38
- Rainer Geißler: Entwicklung zur Dienstleistungsgesellschaft. In: Informationen zur politischen Bildung. Nr. 269: Sozialer Wandel in Deutschland, 2000, p. 19f.
- Hans Joachim Pohl: Kritik der Drei-Sektoren-Theorie. ("Criticism of the Three Sector Theory") In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung. Issue 4/Year 03/1970, p. 313-325
- Stefan Nährlich: Dritter Sektor: "Organisationen zwischen Markt und Staat." ("Third Sector: Organizations Between Market and State"). From "Theorie der Bürgergesellschaft" des Rundbriefes Aktive Bürgerschaft ("Theory of the Civil Society" of the newsletter "Active Civil Society") 4/2003
- Uwe Staroske: Die Drei-Sektoren-Hypothese: Darstellung und kritische Würdigung aus heutiger Sicht ("The Three-Sector-Hypothesis: Presentation and Critical Appraisal from a Contemporary View"). Roderer Verlag, Regensburg 1995