Sectors’ analysis: a come-back kid?

Grazia Ietto-Gillies

When I was a young student in the 1960s Rome looking at the structure of sectors in a country was seen as very important for an understanding of the economy. The structure of the three main sectors – agriculture, manufacturing and services – would tell us something of relevance for performance and policy in relation to developing and developed countries (Fisher, 1939; Clark, 1940). It would also enlighten us about ongoing and, possibly, future performance of advanced countries. On the latter issue the work of Nicholas Kaldor (1967) and his policy recommendations for Britain revolved around the issue of productivity effects in the shift of employment from the manufacturing to the services sector. Moreover, the analysis of sectors was also encouraged by the study and applications of input/output tables (Leontief 1941).

 Move forward a couple of decades and more the analysis shifted to macro and firm-level issues and problems. The latter – the micro side- was aided by the increasing availability of large digital databases. We almost forgot about sectors and their relevance except that they surfaced now and then in innovation and technology studies (Pavitt, 1984).

The last decade has seen a resurgence of interest in the analysis of sectors and sectoral structures. Input output data and analysis are being used in relation to the changing structure of trade vis-à-vis the considerable increase in global value chains (UNCTAD, 2013). Digitalization is revolutionizing products, processes, the organization of production and is also affecting the demarcation between sectors (Ietto-Gillies and Trentini, 2022). The latter is often a contested issue between companies, their workforce and governments: Is Uber a transport company or a technology company? Is Facebook/Meta a publishing/media company or a technology company? According to what answers we give, different rules and regulations apply to those two – and to their interaction with other economic agents – as well as to other so-called ‘technology’ companies (Ietto-Gillies, 2022).

Today sectors continue to be seen as relevant in innovation and technology studies. Almudi et al (2021) – a theoretical, simulation study – argues in favour of sectors studies in analyses of absorptive capacity in order to shed light on bottlenecks and target innovation/industrial policies to specific sectors rather than the economy as a whole. A current study of absorptive capacity applies UK Community Innovation Survey (UKIS) data to an analysis of 25 sectors alongside a macro study of 24 European countries (Frenz and Ietto-Gillies, 2022).


Almudi, I., Fatas-Villafranca, F., Fernandez-Marquez, C. M., Potts, J. and Vasquez, F.J., (2020), ‘Absorptive Capacity in a two-sector neo-Schumpterian model: a new role for innovation policy’, Industrial and Corporate Change, Vol. 29, 2: 507-31.

Clark, C. (1940), The Conditions of Economic Progress, London: MacMillan

Fisher, A. G. B. (1939), ‘Production, Primary, Secondary and Tertiary, Economic Records, 15, 1: 24-38.

Frenz, M. and Ietto-Gillies, G. (2022), ‘Absorptive capacity: a policy-led, dimensional analysis. Theoretical framework and estimates for 24 countries and 25 UK sectors’, (work-in-progress).

Ietto-Gillies, G. and Trentini, C. (2022b), Sectoral structure and the digital era. Conceptual and empirical analysis’, (under journal review process)

Ietto-Gillies, G. (2022a), ‘Transnationality in the XXI century. Concept and indicators’, Critical Perspectives on International Business, 18,3: pp.338-361