Twenty years ago, some “serious” business thinkers used to lament the rise of the US service economy. They argued that a service-based economy was nothing more than (and this is an actual quote) “a bunch of people washing each other’s underwear.” This was taken as a serious critique. A service economy was doomed, they reasoned, because you couldn’t export services and bring in wealth the way manufacturing enables you to export goods to bring in wealth.
Well, it turns out those “serious” thinkers got it all wrong. This from today’s New York Times:
In the United States, services increasingly dominate the economy. Employment in this sector has risen steadily since the 1960s, with 70 percent of Americans now working in service industries.
And America already exports more services than any other country in the world, even more than the next two competitors combined. In 2011, that amounted to $612 billion exported in services, up 10.1 percent from 2009, and up 136 percent since 1991.
Still, there is great untapped potential for more, since all of these exports are being sold from a tiny share of all the American companies that could participate in the global marketplace.
“There is this huge infrastructure boom where these big, fast-growing economies are going to need to build out their roads, sewers, telecommunications networks, factories, airports, harbors, you name it,” said J. Bradford Jensen, an economist at the Peterson Institute for International Economics and author of a recent book on global services trade. “All those projects require armies of architects, engineers, project managers, financial insurers. These are all the kinds of tradable services that we have an advantage in providing.”
You can read the full story here.