Share of Services in GDP – China

Service Sector Employment share – China

 Share of Services in GDP – India

Service Sector Employment share – India

If we compare a year, say 2018, 46.3% of china’s workforce produced 53.3% of the country’s GDP.
While for India only 31.72% of the workforce produced 49.13% of the GDP.
From the graphs it can be said that there is growth in the service economy of India but that growth
is not being reflected in the employment growth in the sector.

Source:statista.com

Knowledge economy

The knowledge economy is a system of consumption and production that is based on intellectual
capital. In particular, it refers to the ability to capitalize on scientific discoveries and basic and
applied research. In a knowledge economy, a significant component of value may thus consist of
intangible assets such as the value of its workers' knowledge or intellectual property.
(source: Investopedia.com)

We had defined service as a process/performance utilising knowledge and skills for mutual benefit.

Transportation is an example of service but it also depends on the physical assets like mode and
medium of transport. Similarly retail, it is also a service but location, goods that are sold are very
much the part of a service.

Consulting, legal services, advisory services, designing are also services but they depend on assets
which are completely intellectual in nature i.e knowledge based. There are institutions supporting
this like patent organisations, courts, educational institutions, training programs all which bank upon
and support the knowledge and skills of the workforce.

This is also like the product-service continuum, where a service moves towards a knowledge
economy as its dependency on physical assets decreases and is based completely on knowledge and
skills of the workforce.