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Australia's service sector: A study in diversity

Staff research paper

This paper by Rosalie McLachlan, Colin Clark and Ian Monday was released on 13 March 2002. The paper aims to contribute to a better understanding of Australia’s service sector, which accounts for more than three-quarters of the economy's output and for four out of every five jobs, and the important role it plays in the economy.

As well it identifies and discusses key changes over the last 20 years or so, looking at the relative performance of different service industries in terms of employment, productivity, trade and investment; and the shifting role of services in economic activity and the extent to which links between service industries and the rest of the economy have changed.

Finally, it explores: the underlying determinants of changes in the service sector; the notion of ‘productivity drag’; the types of jobs created by the growth of services; what service trade means and why some services are becoming more tradeable.

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  • Contents

Services dominate economic activity in Australia. They account for more than three-quarters of national output and for four out of every five jobs. Services also provide essential inputs into virtually every good and service produced in the economy.

But despite its importance, the service sector is not well understood. The Staff Research Paper, Australia's Service Sector: A Study in Diversity, seeks to dispel some of the myths commonly harboured about service jobs, service trade and the contribution services make to productivity improvements and living standards.

Background information

02 6240 3330

Cover, Copyright, Contents, Acknowledgements, Abbreviations, Key Messages, Overview

1 Why study Australia's service sector?
1.1 Myths and misperceptions
1.2 Objectives of the study
1.3 Structure of the paper

2 Defining and classifying services
2.1 What are services?
2.2 Classifying services

3 The role of services in the economy
3.1 The importance of the service sector
3.2 Growth of the service sector
3.3 Why have services grown so rapidly?
3.4 Services outlook

4 Jobs in the service sector
4.1 The service sector - where most Australians work
4.2 Trends in service employment
4.3 Service jobs - the 'good' versus 'bad' jobs debate
4.4 The diversity of service employment

5 Trade in services
5.1 How tradeable are services?
5.2 The growth in international service trade
5.3 Australia's service trade
5.4 Impediments to growth in services trade

6 Service sector performance
6.1 Measuring productivity for services
6.2 Service productivity - what the numbers say
6.3 International comparisons

A Alternative approaches to classifying services