During the period of 1981~1991, urban services industries in Korea have almost doubled their absolute size and experienced noticeable but not significant structural changes. The growth of producer services sector can be ascribed to manufacturing growt...
During the period of 1981~1991, urban services industries in Korea have almost doubled their absolute size and experienced noticeable but not significant structural changes. The growth of producer services sector can be ascribed to manufacturing growth, while both personal in¬come increase and population size change caused consumer services sector to slowly grow despite its declining significance in urban services composition.
An empirical analysis concerning the effects of urban services growth on urban economic development has been approached from two perspectives, that is, economic base and locational competitiveness. The results revealed that, except in Seoul and tourism cities, urban services industries did not act as export sector which would create income and employment opportunities. Although urban producer services in total have scarcely contributed to raising manufacturing productivity, urban business services most closely related to manufacturing are found to cause manufacturing productivity to grow to some extent. It is concluded that agglomeration of business services in urban areas could become new economic base as a substitute for their declining manufacturing base, and strengthen their locational advantages capable of inducing new firms.