Chart of the Day: Greater Wealth More Services

Today’s Chart of the Day was provided by my colleague and fellow Portfolio Manager Angie Parsons from an article in the Economist. It shows the percentage that industrial jobs contribute to total employment for Germany, Britain, China, US, and all other countries going back to 1801 in various times as it related to their economic development during their increases in wealth.

The chart shows that as populations move away from agriculture and towards manufacturing, a country's wealth grows. As growth continues and more income is spent on services than goods, employment moves away from manufacturing and toward services.

Since this is repeated over several examples, the article makes the case that the disappearance of factory jobs is an inevitable part of economic development. However, as we move into the mid-21st Century, and AI and robots begin to take over many of the service rolls, will there be a shift back to manufacturing with the aid of these new technologies?