Transcending the Traditional Industry Theory 1
In the 21st century，every country，especially our China that has never taken the leading position after the agricultural economy, is faced with a more profound industrial revolution，and a new great industrial structure adjustment is awaiting us, which is full of opportunities and challenges.
On September 26, 1792，in the name of congratulating on Emperor Qianlong’s birthday, Great Britain sent a great diplomatic corps headed by Lord Macartney to “The Central Country”, in five ships. They sailed for 10 months and reached Dagu Port of Tianjin at the end of July 1793. On September 14, they presented themselves to Emperor Qianlong, and submitted the letters of credence and all kinds of industrial products to the emperor. However，China posed itself as a great central state then, so it did not take this unusual visit seriously, paying little attention to the industrial products from Britain, as it never realized the leading role of industry in the future economy.
Chinese economy used to rank No. 1 in the world，with GNP accounting for one third of the world，but then it slid gradually to the verge of backwardness. Of course, there were many causes, but among others, a very important one was: from that moment in the Qianlong Period, China missed the opportunity to catch up with the industrial revolution and industrial structure transformation that opened up the new era of mankind! For so many centuries, China had been far ahead of the West, but it was cast behind out and away by the world just because it failed to transform from agriculture to industrial revolution. This great strategic misplay of that time has put China into disgrace and disaster for more than one century!
A backward industrial structure may lead a very advanced economy towards decline, but an advanced industrial structure may lead a backward economy to prosperity!
Let’s turn our eyes to the 1980’s. Japanese economy shocked America violently，plunging America into a great panic, and every American was worrying about “Japan’s possible purchase of America”. For a time, economists all over the world were lost in the study on the Japanese mode，crying up Japan’s wonder. However，in a short period of one decade, everything changed. Japan’s economy got into a period of wandering and sagging, whereas America worked a “new economy” wonder lasting as long as 110 months, which not only released the terrible alarm of that year, but also consolidated its throne as the overlord of global economy. What helped US economy turn defeat into victory was just their industrial structure transformation! US economy underwent the greatest industrial transformation in the century：Manufacturing industry has shifted to hi-tech industry，the former manufacturing industry has almost degenerated as an appendage of economy, whereas the high-grade technology industries represented by network technology and information technology have become the greatest powers boosting the sustained growth of American new economy. “The Silicon Valley Wonder” has replaced “The Japanese Wonder”. Yet，Silicon Valley is merely a valley 48 km long and 16 km wide in America, even smaller than a county, but its annual production value is equivalent to 1/4 of China’s GDP! The wealth in astronomical figures generated from it has shocked the whole world, thus, Silicon Valley has become a target of worship and imitation, hence, Singapore, Japan, Taiwan, Hong Kong, Korea, China and so on are vying with each other to build up their own “Silicon Valley”.
History has proved repeatedly：Transformation of the industrial structure and change of the leading industry play a decisive role in economical development!
At present，the generally accepted theory on industrial structure is the “trio industry” theory，namely, the first industry (agriculture), the secondary industry (industry) and the third/tertiary industry(service industry).In 1940，British economist C. Clark began to use the concept of “tertiary industry” widely. From then on，this theory was put into extensive use in the world，and many countries have classified their sectors of national economy in terms of this theory.
Today，we can see：In the developed countries, the structure of the three major industries has undergone some significant change. Generally, the work force in the first industry (agriculture) has dropped, only accounting for 5 ~ 6%，and in the USA it only accounts for less than 2%.The proportion of workers in the productive industry has also greatly dropped: In most developed countries, it has dropped to below 30%, and in America, the proportion of productive workers has dropped from 33% to 17% in the recent 30 years. If we are still tied down by the concept of worker-peasant alliance, America’s base of worker-peasant alliance is only less than 20%. More and more work forces are turning to the flourishing tertiary industry that is on the upgrade all the time. Meanwhile，in the proportion of the GDP, that of agriculture and industry is getting lower and lower, and the service industry has become the major factor for the growth of GDP in many countries.
The traditional economy theory classified all that do not belong to the first industry and secondary industry into the tertiary industry. It is just like taking the tertiary industry as a big bag, letting everything be put into it. Apart from agriculture and industry, all the other sectors are put into this big bag, so it has become a hodgepodge.
Such a classification was proper in the time when agriculture and industry were in the dominant position of economy and the tertiary industry was still at the embryonic stage；However，in the present time when agriculture and industry are increasingly shrinking and dropping to very unimportant positions and the tertiary industry is becoming more and more diversified in economic activities and its share in the total output value is tending to be dominant, such a classification seems to be very improper.
Development of the times is forcing a change in the industrial structure. Technology industry and human-centered industry are just showing their great special power in the tertiary industry, becoming more and more important in position. These two major industries should be separated from the tertiary industry, and get their due status.
Even those who have never read Analects of Confucius are familiar with the saying “Right names lead to right things”, so, “rectification of the name” is very important. The name of “tertiary industry” may give people an impression that it is in a secondary position in economy, ranking as “the third”. But as a matter of fact, this “third” only resulted from the historic order of industries (the order of appearance in history). If we order according to the future sequence of industries (order of importance in future economy), we should just revert the order. Meanwhile, “the quintet industry” theory should replace the “trio industry” theory, becoming the compass for future economy development.
[...] The Money Times - Money Matters, Loans, Finance, Credit Cards, Travel guides. The best ways to spend… wrote an interesting post today onHere’s a quick excerptTranscending the Traditional Industry Theory 1 In the 21st century?every country?especially our China that has never taken the leading position after the agricultural economy, is faced with a more profound industrial revolution?and a new great industrial structure adjustment is awaiting us, which is full of opportunities and challenges. On September 26, 1792?in the name of congratulating on Emperor Qianlong’s birthday, Great Britain sent a great diplomatic corps headed by Lord Macartney to “T [...]