Growth and Change in the Service Sector of the U.S.: A Spatial Perspective

Abstract Although there is growing recognition that services play a major role in developed economies, knowledge concerning the service sector, including its spatial characteristics, is quite limited. This study examines the spatial structure of the U.S. service sector and change in that structure from 1958 to 1977. It is based on an analysis of service employment and employment change for a sample of U.S. SMSAs and nonmetropolitan areas. Most of the change in service structure that took place during the study period was focused in business and professional services and in finance, insurance, and real estate. Many individual industries in these groupings exhibited both downfiltering from larger to smaller places and very strong growth in the South. As a result, the South reversed its relative deficiency in many specialized services. A relationship between total employment growth and both the concentration in and relative growth of business, professional, and financial services was observed. Study results suggest that regional development policies that foster service growth could benefit not only large SMSAs but many smaller places as well.