Globalization and Business Services: A Growth Opportunity?

The service sector now accounts for the lion’s share of employment in the United States, and it continues to expand. A broad measure of the service sector accounts for about 85 percent of U.S. employment and is growing. By contrast, over the past 50 years, employment in the goods-producing sector (manufacturing, mining, agriculture, and construction) has steadily declined. In 2007, the manufacturing sector accounted for only about 10 percent of U.S. employment. In spite of these trends, services have often been treated as an afterthought by policymakers, especially in the area of trade policy, where the focus has tended to be on agriculture and manufactured goods. The important role of the service sector in the U.S. economy has been underappreciated and misunderstood for several reasons. First, there has been a long-running assumption that manufacturing is more important than the service sector. Second, many falsely believe that manufacturing jobs are “good jobs ” and that service jobs are “burger-flipper ” jobs. Third, the service sector is large and diverse, making it difficult to characterize. Finally, although official statistics on the service sector are more available than ever before, data collection still lags that collected for agricultur