EPISODE #005 — What Produces Value? (Sectoral Structure)

In EPISODE #004, we asked who works by examining labor force participation and unemployment. Now we ask a different question: where is value actually produced within the economy?This episode maps where value is produced by comparing each sector’s employment share with its value-added share. When a sector’s value-added share is larger than its employment share, that sector tends to generate more value per worker than the economy-wide average.

Takeaway

Sectoral structure provides a first map of productivity differences.
Comparing employment share with value-added share shows where labor is concentrated and where value is concentrated.

Table 1 provides a structural map of where labor is located and where value is generated across sectors. It compares each sector’s share of employment with its share of value added across the G7 economies in 2021, the latest year with complete coverage for both series.

Country	Agriculture		Industry		Services
Country	Emp %	VA %	Emp %	VA %	Emp %	VA %
Canada	1.36	1.60	19.34	25.33	79.30	66.39
France	2.51	1.46	19.51	16.09	77.97	70.67
Germany	1.21	0.75	27.38	25.16	71.41	63.55
Italy	4.05	1.83	26.64	22.56	69.31	64.84
Japan	3.17	1.01	23.70	29.22	73.14	69.02
United Kingdom	0.90	0.70	16.92	16.96	82.18	72.17
United States	1.66	0.96	19.18	17.88	79.15	77.60

Table 1. Sectoral employment share and value-added share (%), G7 economies, 2021.
Emp % = sector share of total employment. VA % = sector share of total value added. Sector groupings follow the standard Agriculture / Industry / Services convention. Values may not sum to exactly 100 due to rounding. Source: World Bank sectoral employment and value-added indicators. 2021 is used because it is the latest year with complete G7 coverage for both series.

In advanced economies, it is normal for services to employ the majority of workers, while agriculture becomes a very small share. This is a long-run outcome of structural transformation as incomes rise and production becomes more specialized.

Yet the map still contains meaningful differences. The balance between industry and services varies across the G7, and those differences quietly shape what we will measure next.

Takeaway

Sectoral structure is a fast diagnostic. When VA% > Emp%, that sector tends to have higher average productivity. When VA% < Emp%, it tends to have lower average productivity.

This episode is a map — interpretation comes next.

Unresolved Question:
→ If sectoral structure shapes productivity, why do some countries maintain strong industry while others deindustrialize?

Next:
EPISODE #006 — Who Works Where?

All tables and figures on this site are generated from publicly available macroeconomic datasets.