Three-sector theory

The three-sector hypothesis is an economic theory which differentiates the economy in raw materials, processing of raw materials and services. It was developed in the 1930s by the British economists Allan GB Fisher and Colin G. Clark elaborated. Clark on the basis that a statement made by Sir William Petty, published in 1690. Therefore, this hypothesis is also sometimes called Petty 's Law. In Germany they became wider known through the translation of a work of French economist Jean Fourastié.


The three-sector hypothesis describes that shifted the focus of economic activity first by the primary sector ( raw materials ) to the secondary ( processing of raw materials ), and then click the tertiary sector (services). Fourastié considers the development of extremely optimistic and speaks in one of his books ( " The great hope of the Twentieth Century " ) about the rising prosperity, social security, blossoming of education and culture, a higher level of qualification, humanization of work and avoid unemployment.

Countries with a low per capita income have a low level of development. The gross domestic product is generated from the primary ( the agricultural production ) and the tertiary sector ( the services in the tourism sector ). Where the foreign exchange earnings from the services sector playing an increasingly dominant role in contrast to the income from the primary sector. Advanced developed countries with average per capita income, so-called emerging economies, derive income primarily in the secondary sector, where you have to manifest that in the last 20 to 30 years in emerging countries undergoes a shift of economic activities. So stagnates the number of employees as well as their value in the primary sector. In contrast, a positive growth is recorded both in the workforce and in its earning in the region of the tertiary sector (services), as amplified revenue is generated due to the restructuring of tourism. In highly developed countries with high income of the tertiary sector has a dominant share of total income acquisition.

Using the number of workers or the share of GNP ( Gross National Product) in the various economic sectors can be seen that Germany was an industrial society until the late 19th century, an agricultural society and until the 70 -20th century. The tertiary sector gained exponentially from the mid-20th century and grew in importance with respect to the value added soon about the secondary sector. Since that time we can speak in Germany of a service society.

Structural change after Fourastié

The shift in the employment rate within the various economic sectors in different phases according to Jean Fourastié:

First phase: Traditional civilizations

Number of employees:

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

This phase represents a society that is not well developed. Agriculture is the major part in subsistence and one can hardly speak of the use of machinery. The level of development corresponds to the European countries in the early Middle Ages or a developing country.

Second phase: the transition period

Number of employees:

  • Primary Sector: 20 %
  • Secondary Sector: 40%
  • Tertiary sector: 40%

In the primary sector more and more machines are used; this reduces the need for labor. As a result, the demand for machines that are produced by the secondary sector. The transition phase begins with an event or process that is equivalent to the industrialization: increasing mechanization or automation, assembly line production, manufacture, etc.

Numerous synergies began to develop with the development of industrialization. This was an example of a strong banking and credit services, administrative facilities, technology and research centers as well as universities and business incubators that were in cooperation with the major companies in the leading sectors of the economy. Facilities becoming more and more relevant tertiary sector, which includes the services.

Third phase: Tertiary civilization

Employment numbers:

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

The Primary and Secondary sector are more and more subjected to the automation and decreases the demand for labor. Therefore, the demand in the tertiary sector. We are in the society of the future, a service company. Nowadays, it has come in the tertiary sector to such a huge increase that has begun to divide them; as the quaternary sector has formed, mainly dealing with information.


Various empirical studies seem to confirm the three-sector hypothesis, but four of forecast errors in Fourastiés book are Recognizing the great hope of the Twentieth Century:

Fourastié described the tertiary sector - which is equated generally with the service - as a production sector with little or no technical progress and thus possibly small increases in labor productivity. The assignment of the service sector to the tertiary sector that is now preserved only in a few areas. Among other things, therefore, the inclusion of a fourth sector, the information sector propagated and predicted a development of the information society instead of a service society.