Saved by services? Employment, growth and the service sector

This article discusses the role of the service sector in generating economic growth and employment. We argue that defining, measuring and distinguishing service output as opposed to output of goods has become increasingly difficult, which makes the traditional attempts to define a specific role for the service sector more or less futile. Instead, it is argued that the diverse activities performed within the service sector form an integral part of a well-functioning economy as a whole. Worrying about the relative size of the service sector helps us little: what matters is each sector's contribution to the overall productivity growth.