Trying to understand some of the core mechanics of tertiarization in developed economies.
According to the WorldBank,
"As incomes continue to rise, people’s needs become less “material” and they begin to demand more services—in health, education, entertainment, and many other areas.
Meanwhile, labor productivity in services does not grow as fast as it does in agriculture and industry because most service jobs cannot be filled by machines. This makes services more expensive relative to agricultural and industrial goods, further increasing the share of services in GDP."
Trying to understand in a bit more detail some of these claims though, such as:
- Why does higher income imply less "material" demands, i.e. products specifically formatted as services rather than goods (couldn't rich people in theory just crave more expensive pharmaceutical drugs, textbooks, and gaming consoles, rather than associated healthcare, education, and entertainment services)?
- Why can't most service jobs be filled by machines? Does this just mean as technology stands today (vs. roombas, retail kiosks, self-driving cars, etc.)? What if any inherent characteristics of services make them more difficult to automate?
- Why does inefficient production make services more expensive, and this make them a higher percentage of GDP? (Here I'm just trying to understand the economic principles involved)