Fundamentals of Business

Structural transformation according to Fo Fourastie

The distribution of the workforce among the three sectors progresses through different stages as follows, according to Fourastie:
First phase: Traditional civilisations
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This phase represents a society which is scientifically not yet very developed, with a negligible use of machinery. The state of development corresponds to that of European countries in the early middle Ages, or that of a modern day country. We should think about all these sort kinds of matter.

Second phase: Transitional period
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More machinery is deployed in the primary sector, which reduces the number of workers needed. As a result the demand for machinery production in the second sector increases. The transitional phase begins with an event which can be identified with industrialisation: far reaching mechanisation (and therefore automation) of manufacture, such as the use of conveyor belts. The tertiary sector begins to develop, as do the financial sector and the power of the state.

Third phase: Tertiary civilization
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The primary and secondary sectors are increasingly dominated by automation, and the demand for workforce numbers falls in these sectors. It is replaced by the growing demands of the tertiary sector. The situation now corresponds to modern day industrial societies and the society of the future, the service or post industrial society.
Today the tertiary sector has grown to such an enormous size that it is sometimes further divided into an information-based quaternary sector is the sector of industry including the intellectual services - research, development, and information. It was once considered part of the tertiary sector of industry.

This includes the high technology industry, with information and communication technology and some forms of scientific research, as well as education and consulting, and information industry. The quaternary sector can be seen as the sector in which companies invest in order to ensure further expansion. Research will be directed into cutting costs, tapping into markets, producing innovative ideas, new production methods and methods of manufacture, amongst others. To many industries, such as the pharmaceutical industry, the sector is the most valuable because it creates future branded products which the company will profit from.