IGCSE Economics 0455 – Economic Development: Sector Size Differences
Economic Development – Differences in the Size of Primary, Secondary and Tertiary Sectors
1. Introduction
One of the clearest ways to see how far a country has developed is to look at the relative size of its three economic sectors:
Primary sector – agriculture, forestry, fishing, mining.
Secondary sector – manufacturing and construction.
Tertiary sector – services such as retail, finance, education, health and tourism.
As a country moves from low‑income to high‑income status, the contribution of each sector to GDP and employment typically changes in a predictable pattern.
2. Why Sector Composition Matters
Understanding sector size helps us to explain:
Levels of income per head.
Productivity differences between economies.
Vulnerability to external shocks (e.g., commodity price changes).
Policy priorities for sustainable development.
3. Typical Patterns of Sector Development
In general, the following trends are observed:
Low‑income countries: large primary sector, small secondary and tertiary sectors.
Middle‑income countries: secondary sector expands rapidly, tertiary sector begins to grow.
High‑income (developed) countries: primary sector is very small, secondary sector moderate, tertiary sector dominates.
4. Comparative Data (Illustrative)
The table below shows the approximate share of each sector in GDP for three representative economies.
Country (Income Level)
Primary (%)
Secondary (%)
Tertiary (%)
Kenya (Low‑income)
33
22
45
Bangladesh (Lower‑middle‑income)
23
30
47
United Kingdom (High‑income)
1
20
79
5. Calculating Sector Share
The share of a sector in GDP can be expressed mathematically as:
\$\text{Sector Share (\%)} = \frac{\text{Value of Output of the Sector}}{\text{Total GDP}} \times 100\$
6. Factors Influencing the Size of Each Sector
Natural resource endowment – abundant arable land or minerals boost the primary sector.
Level of technology – mechanisation reduces labour needed in agriculture, freeing workers for industry and services.
Human capital – education and skills enable a shift towards manufacturing and high‑value services.
Infrastructure – transport, energy and communications are essential for secondary and tertiary growth.
Government policy – subsidies, trade tariffs, and investment incentives can accelerate or hinder sectoral change.
7. Implications for Economic Development
When the tertiary sector becomes dominant, economies tend to experience:
Higher average incomes.
Greater productivity per worker.
More stable growth, less dependent on commodity price swings.
Increased urbanisation and changes in labour market structure.
Conversely, economies that remain heavily reliant on the primary sector may face:
Low wages and limited job creation.
Vulnerability to climate change and global demand fluctuations.
Difficulty in financing education and health services.
8. Suggested Diagram
Suggested diagram: A stacked bar chart comparing the sectoral composition of GDP for a low‑income, a middle‑income and a high‑income country.
9. Summary Checklist for Students
Identify the three economic sectors and their main activities.
Explain why the primary sector is larger in less‑developed economies.
Describe the typical progression of sector sizes as a country develops.
Use the formula to calculate sector shares when given data.
Discuss at least three factors that cause a shift from primary to secondary and tertiary activities.
Evaluate the advantages and disadvantages of a large tertiary sector for a country’s long‑term development.