Government statisticians are simple folk, easily amused. And so in the 1970s we used to enjoy pointing out that there were coal miners at work in Grosvenor Place, just across the road from Buckingham Palace.
There are two ways (at least) of classifying the work that somebody does: one is by reference to their employer’s line of business, the other based on their own occupation & skills. And so secretaries, typists, accountants & managers working at the headquarters of the National Coal Board were all assigned to the mining industry.
I was remembering this as I read Ha-Joon Chang’s Thing 9 about capitalism, which challenges the idea that we live in a post-industrial society & that our future prosperity will depend on the provision of services.
Just one part of the apparent decline of industrial employment & the accompanying growth in services is simply a result of a statistical artefact of this kind, driven by outsourcing & by the trend towards businesses which are conglomerates.
If the National Coal Board had outsourced its cleaning, works canteen, typing services or payroll to specialist firms, then the people who provided those services would cease to be miners.
And in the modern economy any firm which maintains a manufacturing core but has expanded into other areas, whether related specialist services or something completely unrelated, may be re-classified according to their new main function.
Ha-Joon Chang brilliantly spells out how an economy dependent on services risks low growth in productivity, balance of payments problems & increasing lack of competitiveness as the most valuable & internationally traded services are those (such as engineering consultancy) which support manufacturing.
I hope that Michael Gove in particular is thinking about the implications of this for his education policies.
Links
[PDF] UK Standard Industrial Classification of Economic Activities 2003
INTRODUCTION TO UK STANDARD INDUSTRIAL CLASSIFICATION OF ECONOMIC ACTIVITIES UK SIC(92)
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