For the first time in 10,000 years, farming is not the dominating industry
The international reporting on the KILM report mostly rehashed the original Reuters report, and failed to emphasize the most interesting tidbit: that of the three economic activities – farming, industry, and services – farming is no longer the largest global employer.
Living in a post-industrial society – perhaps even post-information society – it’s easy to lose perspective sometimes. Today’s wire from Reuters about the ILO’s Key Indicators of the Labour Market (KILM) was widely reported, including the New York Times coverage where I first read it.
The business and mainstream press focus on our own economic competitiveness vis-a-vis China and Europe. E.g. NYT opens their reporting with “American workers are the world’s most productive, followed by the Irish, though productivity is rising fastest in China and much of the rest of Asia, according to the International Labor Organization.” Wall Street Journal leads with “U.S. workers continue to lead the world in productivity, though many East Asian economies are quickly advancing, according to a new report by the International Labour Organization.”
They go on to note various interesting details, for example if you take into account the number of hours worked, the US falls to second place after Norway (Americans are noted for working many hours). More significantly, the productivity head start that the west has over China and other East Asian economies is shrinking; output per worker grew to one-fifth that of an western economy industrialized worker, from one-eighth ten years ago, a dramatic improvement. The economic growth in Asia led to the number of working poor falling by half, though in south-Saharan Africa it is getting worse. World unemployment fell from 6.4% to 6.3%.
By and large the report shows some serious progress in the world economy, coupled with some regional setbacks. But there was a small item about farming that prompted me to dig up the actual KILM report and look through it.
Here’s what the report writes (in Box 4b on page 6 of KILM04):
In recent years agriculture has lost its place as the main sector of employment and has been replaced by the services sector, which in 2006 constituted 42.0 per cent of world employment compared to 36.1 per cent for agriculture. As for the industry sector, it represented 21.9 per cent of total employment, which is almost unchanged from ten years ago. Although textbook theory suggests that economic development entails a structural transformation with a shift away from agriculture to the industry sector, this no longer seems to be reflected in reality. Instead of moving into high-productivity jobs in the industry sector, people are moving directly into the services sector, which consists of both high- and low-productivity jobs.
Therefore, it is unclear if the sectoral shift goes hand in hand with productivity increases and thereby a better utilization of the workforce. Agriculture is still the main sector of employment in the world’s poorest regions. Two-thirds of workers in sub-Saharan Africa and almost half of workers in South Asia and South-East Asia & the Pacific are in agriculture.
So, firstly, modernization of large economies is largely bypassing industrialization and going straight to the service sectors – in the western economies the service sector was about two-thirds of the economy, and has grown further (to 71.2%). But the so many workers are moving straight to service industries that their roles have changed. Worldwide, in 1996 agriculture employed 42%, industry 21%, and services 37%. In 2006, the numbers are 36%, 22%, and 42%. So in the period, the service sector has overtaken farming on a global scale.
To me this stuck out as the news of the day. This is a huge milestone. In the west we’re accustomed to the farming sector being 4-6% or so, but that certainly has not been true in most of the word. You might think the industrial revolution was a long time ago, but the reality is that farming has remained the center of the overall human condition. Until sometime in these past few years, that is.
And thus passes a tremendous milestone in the history of our species. Farming, invented around 8000 BC, quickly dominated human activity and has continued to for some 10,000 years. And we even find that the agriculture->industry->services transition doesn’t hold up globally. The industry segment simply isn’t big enough, so increasingly workers go directly from farming to services.
So despite what they tell you at coffee tomorrow about the adoption rates your marketing people expect for your product, you might want to point out the longest paradigm shift of all time; farming handed over the crown to the service sector only just about now.
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