Economic development, ever since the industrial revolution, has almost always been accompanied by structural change.
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Interest in structural transformation, as integral to economic growth, has (once again) come under the spotlight, owing to resumed growth across much of sub-Saharan Africa from the mid-1990s onwards. Growth has been welcome; but the concern is that economies have grown without transformation as agriculture and mining have flourished with too little development of either manufacturing or high-value services.

Economic development, ever since the industrial revolution that began in the late eighteenth century, has almost always been accompanied by structural change. Agriculture, although growing absolutely, declines in relative importance within the economy in its share of both gross domestic product and employment. Manufacturing and services see their shares of GDP and employment increase (Breisinger et al. 2011, Duarte & Restuccia 2010, Herrendorf et al. 2013, Szirmai 2012, Timmer 2009). At any given moment, comparing countries by their GDP per capita shows the close correspondence of this measure to both the share of output from agriculture and the share of employment in agriculture (see Figure below).

There’s a simple reason for this: as economies grow, incomes rise, but people spend proportionately more of their extra wages on manufactured goods and services, and proportionately less on food (Engel’s Law). Hence with economic growth, demand for the former grows faster than demand for farm output. 

Changing importance of sectors is matched by changed location of economic activity.

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