Three-sector hypothesis facts for kids
The Three-sector hypothesis is a large-scale economic type theory. It says that there are three kinds of economic activities, which are very different from each other:
- The extraction of raw materials
- Manufacturing goods
- Providing services
These kinds of activities are called economic sectors. The theory speaks about the primary, secondary, and tertiary sector. The theory was developed by Alan Fisher, Colin Clark and Jean Fourastié in the 1930s. Clark used a speech given by Sir William Petty, in 1690. For this reason the theory is also known as Petty's Law. The first sector is about directly using natural resources, the second sector is about processing these resources to obtain "higher level" goods.
The theory also says that the main focus of the economy of a country will change, from the primary to the secondary, and from the secondary to the tertiary sector, as economic development progresses.
Images for kids
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Industrial output in 2005
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Three sectors according to Fourastié
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This figure illustrates the percentages of a country's economy made up by different sector. The figure illustrates that countries with higher levels of socio-economic development tend to have less of their economy made up of primary and secondary sectors and more emphasis in tertiary sectors. The less developed countries exhibit the inverse pattern.
See also
In Spanish: Hipótesis de los tres sectores para niños
