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Regional Planning -Part IVRegional Growth Theories
Sector Theory/ Stage Theory/Export Base ModelCentral Place Theory/Growth Pole Hypothesis/Cumulative Causation Theory
S.RengasamyMadurai Institute of Social Sciences
 
S.Rengasamy -Madurai Institute of Social SciencesRegional Planning Part III –Regional Growth Theories - Sector/Stage Theories- Export Base Model– Central Place Theory /Growth Pole Hypothesis/Cumulative Causation Theory
2
REGIONAL PLANNING - PART III -REGIONAL GROWTH THEORIESSector Theory - Stage Theory – Export Base Model – Central Place Theory – Growth Pole Hypothesis –Cumulative Causation TheoryWhat makes a region to grow?
Economic theories talk about growth in terms of 
1.
 
increase of income (total income) and / or2.
 
increase of per capita income
Therefore regional growth implies an increase in the total income and/or per capita income of a region. Since the growth of income is always the result of the growth of the use of factors(e.g. land, labour, capital, raw material) of production,
regional growth should imply abetter use of the factors of production such as land, labour, capital etc. of the region.
In addition to these factors,
a region can also grow due to an increase in the level of demand for its commodities from the other regions within the country or outside thecountry.
Thus in regional analysis, growth of a region can result either from
endogenous
(within)factors or from
exogenous
(outside) factors
or both
. Sometimes growth may result from aright location of industries/services. Consequently there are theories of regional growthwhich attempt to explain the growth of a region in terms of 1.
 
Endogenously induced process
. e.g. Sector theory, stage theory2.
 
Exogenously induced process
e.g. Export base model3.
 
Spatially induced process
e.g. Growth pole, Central place
Endogenously Induced Process
Sector Theory
The sector theory has its origin in the empirical observations made by
Colin Clark, SimonKuznets
and others. It is based on the contribution of different sectors of economy atdifferent levels of development. The sector theory places attention on structural changestaking place within an economy in contrast to the export base theory, which emphasizes therole of external relationships.
According to sector theory, the process of economicdevelopment is accompanied by a shift in the employment pattern first from primary tosecondary sector and later on to the tertiary sector.
The explanation is based upon thedifferent income elasticity for the products of these sectors and the relative differences in theaverage earnings per worker in different sectors. The theory is empirically verifiable in termsof cross section and historical trends in different countries or major regions within them.The sector theory with its emphasis on structural changes, differences in elasticity of demandand productivity differences among sectors throws light on some important
Demand for a product is proportionate to its price. A small change in the price may lead to agreater change in demand. In such cases the demand is called elastic. On the other hand,even a big change in price may not cause any change in demand. Such demand is calledinelastic e.g. salt.When income increases, demand for secondary & tertiary products and services increase.
 
S.Rengasamy -Madurai Institute of Social SciencesRegional Planning Part III –Regional Growth Theories - Sector/Stage Theories- Export Base Model– Central Place Theory /Growth Pole Hypothesis/Cumulative Causation Theory
3Sector Theory
The three-sector hypothesis is an economic theory which divides economies into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary), and services(tertiary).
Primary sector:
Involves the extraction and production of raw materials, such as corn, coal,wood and iron. (A coal miner and a fisherman would be workers in the primary sector.)
Secondary sector:
Involves the transformation of raw or intermediate materials into goodse.g. manufacturing steel into cars, or textiles into clothing. (A builder and a dressmaker wouldbe workers in the secondary sector.)
Tertiary sector:
Involves the provision of services to consumers and businesses, such as baby-sitting, cinema and banking. (A shopkeeper and an accountant would be workers in the tertiarysector.)Based on ownership the economy may be subdivided into:1.Public sector 2.Private sector 3.Voluntary sectorBased on the type of product produced, the economy may be subdivided into:Industrial sector & Service Sector According to the three sector economic theory the main focus of an economy's activity shiftsfrom the primary, through the secondary and finally to the tertiary sector. The process asessentially positive, and results in increase in quality of life, social security, blossoming of education and culture, higher level of qualifications, humanization of work, and avoidance of unemployment.Countries with a low per capita income are in an early stage of development; the main part of their national income is achieved through production in the primary sector. Countries in a moreadvanced state of development, with a medium national income, generate their income mostlyin the secondary sector. In highly developed countries with a high income, the tertiary sectordominates the total output of the economy.The distribution of the workforce among the three sectors progresses through different stages
First phase: Traditional civilizationsWorkforce quotas:* Primary sector: 70% * Secondary sector: 20% * Tertiary sector: 10%
This phase represents a society which is scientifically not yet very developed, with a negligibleuse of machinery. The state of development corresponds to that of European countries in theearly middle ages, or that of a modern-day developing country.
Second phase: Transitional periodWorkforce quotas:* Primary sector: 20% * Secondary sector: 50% * Tertiary sector: 30%
More machinery is deployed in the primary sector, which reduces the number of workersneeded. As a result the demand for machinery production in the second sector increases. Thetransitional phase begins with an event which can be identified with industrialization: far-reaching mechanization (and therefore automation) of manufacture, such as the use of conveyor belts.The tertiary sector begins to develop, as do the financial sector and the power of the state.
Third phase: Tertiary civilizationWorkforce quotas:* Primary sector: 10% * Secondary sector: 20% * Tertiary sector: 70%
The primary and secondary sectors are increasingly dominated by automation, and the demandfor workforce numbers falls in these sectors. It is replaced by the growing demands of thetertiary sector. The situation now corresponds to modern-day industrial societies and the societyof the future, the service or post-industrial society. Today the tertiary sector has grown to suchan enormous size that it is sometimes further divided into an information-based quaternarysector, and even a quinary sector based on non-profit services.
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Deepti Unde

SIR ,THANKS FOR MAKING IT AVAILABLE PUBLICALY.I ALSO WANT to download but couldn't .PLZ MAIL ME AT ar.deeptiunde@gmail.com. with good regards....

reply04 / 11 / 2012
Hamzat Aliu Baba

sir i want to say thank you for making this publication public,but there is problem in downloading it.pls send me a copy through ds email aliuh4@gmail.com.thanks

reply03 / 11 / 2012
deleted_fbuser_1298237958

Sir, I am a phd student in urban planning at Georgia Tech. This is a very useful document. Could you please email it to me at arthir@gatech.edu? Thank you very much.

reply02 / 20 / 2011
Chaitya Narayan Dangol

Dear sir I am student of Msc.Tranport Engineering and Management. Please let me download this document or mail me at shiva_2057@yahoo.com Thanking you Shiva Ram KC

reply02 / 17 / 2011
Ritu Agrawal

Sir,I wanted to download this, but could not do it.So, please, can you mail me this document and the other readings on regional planning at my mail id - rituagrawalbitmesra@gmail.com.... with thanks and regards..... ritu

reply09 / 30 / 2010
Ritu Agrawal

sir.... you have uploaded excellent document for us. thanks a lot !

reply09 / 08 / 2010
kkwesi

my email is ebenezer.adarkwa@statsghana.gov.gh please send me a copy of all your articles on regional planning

reply09 / 06 / 2010
kkwesi

want to download this

reply09 / 02 / 2010
S.Rengasamy

All my documents are public. There is no need to ask my permission. If there is any problem please contact me.I will email a copy of this document

09 / 02 / 2010
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