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Growth of the Service Sector and Policies toward Service Industries: A historical overview of the past century (Japanese)

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  • MORIKAWA Masayuki

Abstract

This paper presents a historical overview of the growth of the service sector and policies toward the service industries from the 1920s to the present. Looking back since the early 20th century, the evolution of the industrial structure in Japan toward the service economy can be separated into three phases. In the first phase, from the 1920s to the early 1970s, the share of the service sector gradually increased in parallel with the growth of the manufacturing sector, with an interruption under the tightly controlled industrial activities during the wartime economy. In the second phase, from the early 1970s to the early 1990s, manufacturing share to gross domestic product (GDP) peaked out and the expansion of service sector accelerated. The third phase beginning from the "lost decade" is characterized as structural changes in the service sector stemming from the IT revolution, globalization, and deregulation. In principle, the change in the industrial structure in Japan is consistent with the pattern observed in major advanced countries. Although the service sector was unimportant as the target of industrial policy in the early stage of economic development, it has gradually attracted attention from policymakers. Change in the industrial structure toward the service economy has been closely linked with the development of socio-economic structure such as urbanization and female labor participation.

Suggested Citation

  • MORIKAWA Masayuki, 2017. "Growth of the Service Sector and Policies toward Service Industries: A historical overview of the past century (Japanese)," Policy Discussion Papers (Japanese) 17003, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:rpdpjp:17003
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    File URL: https://www.rieti.go.jp/jp/publications/pdp/17p003.pdf
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    1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, January.
    2. Alan M. Taylor, 1996. "Convergence and International Factor Flows in Theory and History," NBER Working Papers 5798, National Bureau of Economic Research, Inc.
    3. Fujita, Masahisa & Krugman, Paul & Mori, Tomoya, 1999. "On the evolution of hierarchical urban systems1," European Economic Review, Elsevier, vol. 43(2), pages 209-251, February.
    4. Fujita, Masahisa & Tabuchi, Takatoshi, 1997. "Regional growth in postwar Japan," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 643-670, November.
    5. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-1219, December.
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