Importance of the service sector in the economy in Poland and the European Union countries

Friday, 18 March 2016: 4:30 PM
Walentyna Kwiatkowska, Ph.D. , Institute of Economics, University of Lodz, Lodz, Poland
The role of the service sector in the economy is increasing in the process of socio-economic development. This tendency has been confirmed and explained by the three – sector theory formulated by A.G.B. Fisher, C. Clark and J. Fourastie. The authors analysed growth patterns and factors for the three identified sectors of the economy: agriculture, industry and services. According to the three-sector theory, in the course of economic development the share of the agricultural sector in overall employment tends do decrease, then the share of the industrial sector tends to increase, it becomes stable and then declines, and the share of the services sector in overall employment steadily increases. The above trends are determined by the changes in the structure of consumer demand and the effects of technological progress.

Preferences for the development of the service sector arise from its ability to create jobs which require very different skills, the highest e.g. in finance, education and healthcare, and lowest for simple jobs, such as delivering newspapers or cleaning. By delivering modern knowledge-based services the sector provides the basis for the development of the information society.

The main goal of the paper is to show development tendencies in service sectors in Poland and the EU countries and assess them in view of the three-sector theory. The share of the service sector in the total employment and in the total gross value added in the years 2005–2013/2014 will be analysed together with two sub-sectors including market and non-market services.

The research shows that the share of the service sector in total employment and total gross value added has been recently increasing in Poland as well as in other EU countries.

Compared to 2005, the number of people working in services increased in 2014 by 1478 thousand people, i.e. by 19.1%. In the period under study, the share of the service sector in value added accounted for approximately 64%, the share of this sector in total employment accounted for about 58%, and the share of economic entities in this sector accounted for 76-77% of all registered entities.

The Polish economic structure is moving closer to highly developed EU countries, but the gap is still wide. In the highly developed EU countries, the share of the service sector in employment and the gross value added fluctuated around 70-80%.