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Measuring the Interaction Between Manufacturing and Services


Author Info

  • Dirk Pilat
  • Anita Wölfl


This paper examines the interaction between services and manufacturing using several types of data and shows that the distinction between manufacturing and services is blurring. Services make important contributions to production, mainly through their direct contribution to total output and final demand, but to some degree also through their indirect contribution via other industries. However, services are more independent from other industries than the manufacturing sector. Most inputs that are necessary to produce services are derived from the services sector itself. Moreover, their role as providers of intermediate inputs to other industries is not yet as strong as that of the manufacturing sector. The paper also shows that a growing share of workers in the manufacturing sector is engaged in services-related occupations. Using a broad definition of service-related workers, up to 50% of manufacturing workers are in such occupations. Using firm-level data the paper finds that, despite anecdotal evidence on a growing share of services turnover within the manufacturing sector, manufacturing enterprises in most countries are not very diversified in their constituting establishment, i.e. they do not have many establishments engaged in services production. Canada is a notable exception in this respect. In other countries, it is likely that diversification primarily occurs at the level of the enterprise group. On the other hand, data on products suggest that manufacturing firms and establishments appear to derive a growing share of turnover from services, notably in countries such as Finland and Sweden. Mesure de l'interaction entre les industries manufacturières et les services Cette étude examine l’interaction qui existe entre les services et les industries manufacturières, en s’appuyant sur différents types de données. Elle montre que la distinction entre les industries manufacturières et les services tend à s’estomper. Les services apportent d’importantes contributions à la production, principalement sous forme d’apports directs à la production totale et à la demande finale, mais aussi, dans une certaine mesure, à travers leur contribution indirecte. Toutefois, les services sont plus indépendants des autres industries que ne l’est le secteur manufacturier. La plus grande partie des intrants nécessaires à la production des services procède du secteur des services lui-même. De plus, la place des services dans la fourniture d’intrants intermédiaires à d’autres secteurs n’est pas encore aussi importante que celle de l’industrie manufacturière. Ce travail révèle en outre qu’une proportion croissante des travailleurs du secteur manufacturier est employée à des fonctions liées aux services. Si l’on utilise une définition large des fonctions liées aux services, jusqu’à 50 % des travailleurs du secteur manufacturier relèvent de telles fonctions. En s’appuyant sur des données micro-économiques, ce document montre que, malgré des éléments épars qui sembleraient indiquer qu’une part croissante du chiffre d’affaires du secteur manufacturier correspond à des activités de services, dans la plupart des pays, les entreprises manufacturières restent assez peu diversifiées, ce qui signifie qu’elles ne comptent pas beaucoup d’établissements produisant des services. Le Canada constitue une exception notable à cet égard. Dans d’autres pays, il semble plutôt que la diversification s’opère essentiellement au niveau du groupe. Enfin, les données sur les produits suggèrent que les entreprises et les établissements du secteur manufacturier réalisent une part plus importante de leur chiffre d’affaires grâce aux services, notamment dans des pays comme la Finlande et la Suède.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Science, Technology and Industry Working Papers with number 2005/5.

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Date of creation: 31 May 2005
Date of revision:
Handle: RePEc:oec:stiaaa:2005/5-en

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Cited by:
  1. Luis Teigeiro & Jesús Solís, 2007. "Coefficient stability and structural change in the Spanish economy," Economic Change and Restructuring, Springer, vol. 40(4), pages 387-409, December.
  2. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Banco de Espa�a Occasional Papers 0607, Banco de Espa�a.
  3. Liao, Christine Marie & Pasadilla, Gloria O., 2007. "Has Liberalization Strengthened the Link between Services and Manufacturing?," Discussion Papers DP 2007-13, Philippine Institute for Development Studies.
  4. Arjan Lejour & Peter Smith, 2008. "International Trade in Services—Editorial Introduction," Journal of Industry, Competition and Trade, Springer, vol. 8(3), pages 169-180, December.
  5. Castellani, Davide & De Benedictis, Luca & Horgos, Daniel, 2013. "Can we really trust offshoring indices?," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 159-172.
  6. Falk, Martin & Peng, Fei, 2011. "The increasing service intensity of European manufacturing," MPRA Paper 38600, University Library of Munich, Germany.
  7. Camacho-Ballesta, José Antonio & Melikhova, Yulia, 2012. "Terciarización del sistema productivo ibérico: rasgos diferenciales/Tertiarisation of the Iberian Productive System: Differential Features," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 761 (32 pag, Agosto.
  8. Christensen, Jesper Lindgaard, 2013. "The ability of current statistical classifications to separate services and manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 47-60.
  9. Brenton, Paul & Newfarmer, Richard & Walkenhorst, Peter, 2009. "Avenues for Export Diversification: Issues for Low-Income Countries," MPRA Paper 22758, University Library of Munich, Germany.
  10. Magnus Lodefalk, 2014. "The role of services for manufacturing firm exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 150(1), pages 59-82, February.
  11. Bogliacino, Francesco & Lucchese, Matteo & Pianta, Mario, 2013. "Job creation in business services: Innovation, demand, and polarisation," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 95-109.
  12. Antonio Musolesi & Jean-Pierre Huiban, 2010. "Innovation and productivity in knowledge intensive business services," Journal of Productivity Analysis, Springer, vol. 34(1), pages 63-81, August.
  13. Francesco Bogliacino & Matteo Lucchese & Mario Pianta, 2011. "Job creation in business services: innovation, demand, polarisation," JRC-IPTS Working Papers on Corporate R&D and Innovation 2011-04, Institute of Prospective Technological Studies, Joint Research Centre.
  14. Szalavetz, Andrea, 2007. "Műszaki fejlődés és tőkeintenzitás
    [Technological progress and capital intensity]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 184-198.
  15. Noland, Marcus & Park, Donghyun & Estrada, Gemma B., 2012. "Developing the Service Sector as Engine of Growth for Asia: An Overview," ADB Economics Working Paper Series 320, Asian Development Bank.
  16. Szalavetz, Andrea, 2008. "A szolgáltatási szektor és a gazdasági fejlődés
    [The service sector and economic development]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 503-521.
  17. World Bank, 2010. "Reform and Regional Integration of Professional Services in East Africa : Time for Action," World Bank Other Operational Studies 2957, The World Bank.


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