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Growth and Change in the Service Sector of the U.S.: A Spatial Perspective

Growth and Change in the Service Sector of the U.S.: A Spatial Perspective

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Published by Jesús Treviño
This study examines the spatial structure of the U.S. service sector and change in that structure from 1958 to 1977. It is based on an analysis of service employment and employment change for a sample of U.S. SMSAs and nonmetropolitan areas
This study examines the spatial structure of the U.S. service sector and change in that structure from 1958 to 1977. It is based on an analysis of service employment and employment change for a sample of U.S. SMSAs and nonmetropolitan areas

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Published by: Jesús Treviño on Dec 16, 2012
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Growth and Change in the Service Sector of the U.S.: A Spatial PerspectiveAuthor(s): Thomas J. KirnReviewed work(s):Source:
Annals of the Association of American Geographers,
Vol. 77, No. 3 (Sep., 1987), pp.353-372Published by:
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GrowthndChangein theService Sectorof the U.S.:ASpatialPerspective
ThomasJ. KirnDick Conway and Associates,2323Eastlake AvenueEast, Seattle,WA 98102
Abstract.Although heresgrowingecognitionhatervices layamajor olendeveloped conomies,knowledge oncerninghe ervice ector, ncludingts spatial haracteristics,s quiteimited. his studyexamineshepatialtructureftheU.S. serviceector ndchangen thattructurerom958 to1977.It is based onananalysisfservicemploymentndemploymenthangeforsampleofU.S.SMSAsandnonmetropolitanreas. Mostofthechangein service structurehatookplaceduringhestudyperiodwas focused nbusinessndprofessionalervicesndnfinance, nsurance,nd realestate.Manyindividualndustriesn thesegroupingsxhibited othdownfilteringromargero smallerplacesandvery trongrowthn the outh.As a result, heSouth eversedtsrelative eficiencyn many pecializedservices.Arelationshipetween otalemploymentrowthnd both the concentrationn and relativegrowthf business, rofessional,nd financial erviceswas observed.tudyesults uggest hategionaldevelopment oliciesthatfosterervicegrowthouldbenefitotonly argeSMSAsbutmanymallerplacesas well.KeyWords: serviceector, patial structure,ierarchy,ownfiltering,onmetropolitan.
THE
strongrowth f servicendustriesn re-cent decadeshas stimulatedonsiderable e-searchon the nature fthe service ectornd itsroleintheeconomy Daniels1986; BeyersandAlvine 1985;Marshall 1985; Noyelle1983; Stan-back et al.1981; Menchik1980; Marquand1979;O.E.C.D. 1978).Nevertheless,ecauseof the izeand diversityf the erviceector,urunderstand-ing of manyof its characteristics,ncludingtsspatialharacteristics,s quite imited.n this tudyI examinehepatialtructurefU. S.servicem-ploymentndthechanges thatoccurred n thatstructurerom1958 to 1977.What distinguishesthis esearchrommost ther tudiesfthe ervicesector s itsnvestigationf servicesn consider-able sectoraldetail and its examinationf thechanges akinglace notonly nthedifferenten-sus regionsftheU.S.but lso atalllevelsof theurbanhierarchy.
TheRoleof Servicesn RegionalDevelopment
Tounderstandhepatialharacteristicsfser-vice sectorgrowth,t isnecessaryo understandtherole of servicesnregionalevelopment.fterabrief iscussion fthereasonswhy ervicem- ployment as been growing apidly, examine heroleofservices n regional evelopment rom woperspectives:1) in the context f a region's ex-ternaliesand (2)in the context fa region'sinternal evelopment rocesses.Reasonsforthe GrowthofServiceEmploymentThe rapidgrowth f service mploymentn re-centdecades has resultedothromupplyactorsandfromhangesnthepatternfdemandforservices. Onthedemand side, therehas been ashiftn final emandwayfromoodsand towardservices Fuchs 1968; Ginzberg nd Vojta 1981).As incomes have grown,heshareofconsumerspendingllocatedogoodshasdeclined,nd thesharellocated o serviceshasincreased.npart,thisreflects shift nemphasisfromuantityoqualityflifenconsumerehavior nadvancedeconomiesNicosiaandMayer 1976).The intermediateemandforerviceshas alsogrowninrecent decades. This increased con-sumptionfservicesbytheproducersfgoodsand servicess inpartdue to firmsxternalizing
Annalsf heAssociationfAme-ican eographers,7(3), 1987,pp. 353-372?Copyright987by Associationf Americaneographers
353
 
354 Kim
service functions hat previouslyhad been per-formed nternally.More important ave beenchangesnthe business nvironment,uch as thegrowing ize and complexity f firms, hegrowthofmultinational irms, he increase in interna-tionaltrade, nd theproliferationf products.nordero compete n an increasinglyomplexbusi-ness environment,irms ave expanded he mountofeffort evoted toactivities uch as planning,coordination, nd control nd consequently aveincreasedtheiruse of services Stanback et al.1981).Despite thisgrowth n the demandforervicesfromothconsumers nd businesses,ts gener-ally acknowledged hat he most ignificantauseof servicemploymentrowthasbeen a supply-sidephenomenon the relativelylowrateof in-creaseinproductivity,r outputper worker,nserviceselative o goods Fuchs 1968; Haig 1975;Beyers,Alvine, and Johnsen 985).Ifconsump-tionpatterns emain onstant uring periodnwhichproductivityrowsmore lowlyn onesec-tor than n otherectors,hentheproportionfthe laborforceengagedinthelow-productivitysectorwould increase and the proportionnthehigh-productivityectorswoulddecline. Ashiftofconsumptionatternsoward erviceswould end tointensifyhe shift femploymentoward erv-ices, theow-productivityector.Role of ServicesinaRegion's External TiesAccording o exportase theory, region's x-portsrethedrivingorceoftheregionalcon-omy,and thepartof theeconomyhatdoes notexportsdependentpontheexportectoror tsgrowth.Bygeneratingncome,theexportectorcausesgrowthntherest oftheeconomyas aresult f thespendingftheexportingirms ndtheirmployees.There isgrowing videncethat ervicesoftenconstitutesignificanthareof aregion's exportbase.Havingtudied he ervice ectorfthePugetSoundRegionofWashington, eyers,Alvine,ndJohnsen1985)concluded that services are ex-portedo agreaterxtenthanhas been realizedandthatervicexportsreincreasingsashareofbusinessctivityntheserviceector.Smith's(1984) studyfWisconsin ndicates hat erviceexportsan be animportantomponentf theex-portbase ofnonmetropolitanommunities.neimportant ayinwhichservices reexportedsthroughheale ofproducerervicesservicesoldtoproducersfgoodsandservices)tofirms o-cated n otheregions.Consumerervicesre ex-portedprincipally hroughales totouristsndtravelersndbyndividualsivingnsmallcenterspurchasing oods and servicesnlarger enters.The seconddimension faregion's xternal iesis itsimports. romanexportbase perspective,import ubstitutionthe production ithin he re-gionofgoodsand servicesthat had previouslybeenmported)as the ameregional evelopmentimpact sanequivalent ncreasenexports.Mar-quand (1979) suggestshatthe effectfa newserviceestablishmentn aregion s more ikelyto be inimport avinghannexporting.Amajorfocus of export-orientedegionalpol- icies has beentoattractirmshatwould becomepartof theregion's exportbase. Recent contri-butions o the ndustrialocation iteratureuggestthatmanytraditional ocationfactors, uch astransportationostsandaccess to markets nd rawmaterials,ave become lessimportanthantheyusedto be in industrialocationdecisions,whilequality-of-lifeelatedfactorse.g., climate,rec-reationalndculturalpportunities,nd thequal-ityof localschools and public services) havebecome moremportantAdy 1981; Lynch 1973;Joint conomicCommittee 982). Becauseactiv-itiesrelatedoqualityf lifeare provided y theserviceector,heharacteristicsfa region's er-vicesectorcan significantlynfluence ts abilityto attractirms.Additionally, iventhegrowingintermediateemandforervices, t is likely hatmanyndustrialocationdecisionsare influencedbythedifferentialvailabilityfproducerervicesamongregions.Centralplace theory rovidesframeworkorexplainingheexportf consumerervicesfromlargero smallerplacesinthe urbanhierarchy.Thetheorys less effectivenexplaining atternsof tradeorproducerervices.Thisis because thedemandforproducerervicesslessuniformpa-tiallythan sthedemandfor consumerervices,andthefrictionfdistances not assignificantnproducerervices salespatternss it isforcon-sumer ervicesBeyersand Alvine1985). Beyersand Alvine found hat he tradefproducererv-ices betweenplacesdidnotfollow astrict ier-archicalpattern;nstead servicesweretradedbetweenlacesof theamesize,from ower-levelplacestohigher-level laces,andtradewas notnecessarilyith henearest enterfagivenize.Althoughherehas beenanabundance fboththeoretical ndempiricalwork oncentralplacetheory,ittle f it hasfocusedon howthe hier-

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