Leigh Shaw-Taylor 

The service sector, also known as the tertiary sector, comprises all workers not making a physical product. This includes shopkeepers, wholesalers, publicans, hotel workers, people working in financial services, health and social care workers, professional services, and transport workers. 

The UK economy today, like that of all rich countries, is dominated by the service or tertiary sector. According to the 2021 census, fully 76 percent of the labour force is now in the tertiary sector. But when did the service sector become dominant, and when did it begin to grow? Many people think the growth of the service sector is a recent phenomenon, starting perhaps in the 1950s and picking up speed as Britain de-industrialised from the 1970s. However, new long-run data on male occupations collected by the Occupational Structure of Britain c.1379-1911 project tell a different story. 

A barber’s shop. Coloured etching after H.W. Bunbury. Wellcome Collection.

We focus on male occupations in this blog because they are readily available in historical sources. Female occupations are much more difficult to uncover and appear in different sources (for women’s work and wages, see previous contributions from Amy Erickson and Emma Diduch, and look out for a forthcoming post on “Working from home”).

Change and the Industrial Revolution

Figure 1 (below) shows the evolution of male occupational structure over the period 1381-2011. The tertiary sector is shown in red on the graph below. It is clear the tertiary sector has been growing as a share of total employment for many centuries, with the sole exception of the period 1750 to 1800.  

Figure 1. The male occupational structure of England and Wales 1381-2011.

In 1381, when we have data from the poll tax of that year, the share of male employment in the tertiary sector was around 4 percent. By the date of our next observation in 1601 this had nearly doubled to 7.5 percent. We suspect that this early growth was concentrated in the late 16th century, but do not yet have the data to test this hypothesis. Across the 17th century the service sector grew from 7.5 percent in 1601 to 11.6 percent in 1701. The most dynamic sector was the secondary sector.   

When we come to the 18th century, when the secondary sector didn’t grow at all, the most dynamic sector was the tertiary sector. Over the 18th century the tertiary sector grew from 11.6 percent to 15.2 percent of the male labour force, though growth was concentrated in the first half of that period with the sector reaching 14.6 percent by 1761. The reasons for the slowdown in the second half of the 18th century remain unclear. Growth in the 19th century was spectacular, with the tertiary sector growing from 15 percent in 1801 to 36 percent in 1901.  

Two men at a shop counter in a tea and coffee retail shop using scales to measure out coffee beans. Engraving by G. Scott, 1805, after Bell.

If we consider the Industrial Revolution period, 1750 to 1850, structural change did not consist of a shift in the relative importance of labour from agriculture to the secondary sector, as scholarship has so long assumed, but rather of a structural shift from agriculture to the tertiary sector. The spectacular growth of the tertiary sector during this period suggests that the tertiary sector was of crucial importance to the Industrial Revolution. 

More detail: breaking down the tertiary sector 

Table 1 (below) breaks down the tertiary sector into three sub-sectors. ‘Dealers and sellers’ refers to wholesalers and retailers and was dominated by shopkeepers and merchants. This group accounted for as much as 1.5 percent of the male labour force as early as 1601. Their relative importance nearly doubled over the 17th century to reach 2.7 percent by 1701. Growth over the 18th century was modest, but between 1801 and 1851 this sub-sector grew from 3 percent to 4.7 percent. 

Table 1. The male tertiary sector of England and Wales, 1601-1851.

‘Professions and services’ covers a miscellaneous ragbag of occupational groups. It includes health workers, teachers, professions, servants, and innkeepers, and this group made up 4.1 percent of the labour force by 1601. By 1851 it was fully 10.2 percent of the male labour force.  

The final category is transport. This included mariners, boatmen, coach drivers, carters and waggoners, carriers, train drivers and railway labourers. In 1601 the labour force share was 2 percent. By 1851 the figure had reached 7.2 percent. By 1911, 13.4 percent of adult males worked in transport, which is a whopping one man in seven. 

Distribution

Dealers and sellers together with transport workers make up distribution, and both groups were central to the sale, purchase and movement of commodities produced by the primary and secondary sectors. Over time more goods were traded over ever larger distances, and as urbanisation proceeded more goods were moved between town and country. Distribution, which made up half of the tertiary sector, thus knitted the national economy together. By 1911 fully 19.1 percent of adult males worked in distribution. 

As the output of the primary and secondary sectors rose over time, the distributive trades grew in importance. Whereas secondary sector production was increasingly concentrated, the distributive sector was necessarily spread all over the country. Figure 2 (below) shows the regionally ubiquitous nature of the growth of tertiary sector employment across the 19th century.  

Figure 2. Male tertiary sector employment 1813-20 and 1881.

In summary, we can see that there is nothing recent about the growth of the tertiary sector. The tertiary sector has been experiencing almost continuous growth for the last four hundred years and probably longer. Moreover, the tertiary sector and not the secondary sector was the most dynamic sector during the Industrial Revolution. 

Further reading 

• Shaw-Taylor, L. and Wrigley, E. A., ‘Occupational Structure and Population Change’, in R. Floud, J. Humphries, and P. Johnson (eds.), The Cambridge Economic History of Modern Britain, Volume 1: Industrialisation, 1700–1870 (Cambridge, 2014), pp. 53–88. Link to chapter  
• Keibek, S., The male occupational structure of England and Wales, 1600-1850, Cambridge University Ph.D. thesis (2017). https://doi.org/10.17863/CAM.8960 
• Shaw-Taylor, L., and Saito, O., ‘The Occupational Structure of Britain c.1379–1911 and the International Comparative History of Occupational Structure: An overview of findings and where to find them.’ Available here.