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Three-Sector Theory: First Phase: Traditional Civilizations

The three-sector theory divides economies into three sectors of activity: primary (extraction of raw materials), secondary (manufacturing), and tertiary (services). As economies develop, the main focus shifts from primary to secondary and eventually to tertiary. Countries with low incomes rely mainly on primary sectors, those with medium incomes on secondary sectors, and highly developed countries on tertiary sectors. The theory outlines three phases of development: traditional societies rely primarily on primary sectors, transitional economies see growth in secondary sectors, and industrial societies are dominated by tertiary sectors.

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45 views1 page

Three-Sector Theory: First Phase: Traditional Civilizations

The three-sector theory divides economies into three sectors of activity: primary (extraction of raw materials), secondary (manufacturing), and tertiary (services). As economies develop, the main focus shifts from primary to secondary and eventually to tertiary. Countries with low incomes rely mainly on primary sectors, those with medium incomes on secondary sectors, and highly developed countries on tertiary sectors. The theory outlines three phases of development: traditional societies rely primarily on primary sectors, transitional economies see growth in secondary sectors, and industrial societies are dominated by tertiary sectors.

Uploaded by

Mohana Ramasamy
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© © All Rights Reserved
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Three-sector theory

The three-sector theory is an economic theory which divides economies into three sectors
of activity: extraction of raw materials (primary), manufacturing (secondary), and services
(tertiary). It was developed by Alan Fisher, Colin Clark and Jean Fourasti.
According to the theory, the main focus of an economy's activity shifts from the primary,
through the secondary and finally to the tertiary sector. Fourasti saw the process as essentially
positive, and in The Great Hope of the Twentieth Century he writes of the increase in quality of
life, social security, blossoming of education and culture, higher level of qualifications,
humanisation of work, and avoidance of unemployment.
Countries with a low per capita income are in an early state of development; the main part
of theirnational income is achieved through production in the primary sector. Countries in a more
advanced state of development, with a medium national income, generate their income mostly in
the secondary sector. In highly developed countries with a high income, the tertiary sector
dominates the total output of the economy.
First phase: Traditional civilizations
Workforce quotas:

Primary sector: 65%

Secondary sector: 20%

Tertiary sector: 15%


This phase represents a society which is scientifically not yet very developed, with a negligible
use of machinery. The state of development corresponds to that of European countries in the
early Middle Ages, or that of a modern-day developing country.
Second phase: Transitional period
Workforce quotas:

Primary sector: 40%

Secondary sector: 40%

Tertiary sector: 20%


More machinery is deployed in the primary sector, which reduces the number of workers needed.
As a result, the demand for machinery production in the secondary sector increases. The
transitional way or phase begins with an event which can be identified with the industrialisation:
far-reaching mechanisation (and therefore automation) of manufacture, such as the use
of conveyor belts.
The tertiary sector begins to develop, as do the financial sector and the power of the state.
Third phase: Tertiary civilization
Workforce quotas:

Primary sector: 10%

Secondary sector: 20%

Tertiary sector: 70%


The primary and secondary sectors are increasingly dominated by automation, and the demand for
workforce numbers falls in these sectors. It is replaced by the growing demands of the tertiary
sector. The situation now corresponds to modern-day industrial societies and the society of the
future, the service or post-industrial society. Today the tertiary sector has grown to such an
enormous size that it is sometimes further divided into an information-based quaternary sector,
and even a quinary sector based on human services.

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