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Implications of service industry growth for regional development strategies

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Abstract

The United States is becoming an increasingly service-oriented economy. The rapid growth of the tertiary sector has been accompanied by equally rapid technological change in the area of communications, information and data processing. What are the implications for regional growth policies? Are services becoming more “footloose” in their locational orientation and amenable to policy manipulation? This paper tests these propositions by applying, to the tertiary sector, a stochastic model reflecting central-place or other market-oriented theory. The results indicate that, in 1969, the model accurately predicted service activity in 155 Bureau of Economic Analysis areas. Despite recent developments in the sector, service activity remains market oriented. As such, these activities are likely to respond to, but not initiate, regional growth. Unlike export-base or infrastructure stimulation, growth through service development does not represent ageneral policy prescription.

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Authors and Affiliations

  1. Department of Economics, University of Nebraska, USA

    Roger F. Riefler (Associate Professor)

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  1. Roger F. Riefler
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Additional information

This paper summarizes results of a project conducted for Jack Faucett Associates and the Economic Development Administration, U. S. Department of Commerce.

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Riefler, R.F. Implications of service industry growth for regional development strategies. Ann Reg Sci 10, 88–103 (1976). https://doi.org/10.1007/BF01303245

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