Economic Structure and the Modern World-System

Defining Economic Structure

Economic structure refers to the relative share of primary, secondary, tertiary, and quaternary economic activities within a country or region. Measuring this structure is essential for analyzing a nation's development and its position within the global economy.

The Four Sectors of Economic Activity

• Primary Activities: These involve the extraction of natural resources. Examples include agriculture, mining, and fishing. These activities are most prevalent in developing nations, specifically peripheral countries.
• Secondary Activities: These involve processing, fabricating, and assembling raw materials. A common example is automobile assembly.
• Tertiary and Quaternary Activities: These are considered post-industrial sectors, focusing on services and information management. They are primarily located in core countries like Canada and the United States.

Economic Structure and the World-System

Identifying a country’s economic structure helps classify it into the three tiers of the modern world-system: core, semi-periphery, and periphery.

• Periphery: Countries like Yemen often rely on primary activities such as agriculture.
• Semi-Periphery: Countries such as China and South Korea are more likely to host secondary activities.
• Core: High-income nations dominate the tertiary and quaternary sectors.

Correlation Between GDP and Economic Sectors

There is a direct correlation between GDP per capita and the dominant economic activity. Countries practicing primary activities tend to have a lower GDP per capita, while those in core regions with advanced sectors enjoy a higher GDP per capita.

The Transition of Economic Development

Every country undergoes a development transition. While some nations progress faster than others, all core countries were once dominated by the primary sector. Over time, the primary sector is replaced by the secondary sector and eventually the tertiary sector. Currently, the relocation of industrial jobs from core regions (e.g., the USA) to semi-peripheral regions (e.g., India) indicates a growing share of secondary sector activities; these are better-paying jobs than those in the agricultural sector.