The rise of the service economy

This trend has been well documented by numerous studies at the national, provincial, and regional levels. Within the GTA, for example, the share of total employment in the goods-producing sectors has declined from 31% in 1981 to 23% in 1996. Business and professional services have experienced especially high rates of growth, and their share of total GTA employment over the same period has risen from 7 to 16% over the same period.12

Labour Force Survey data for the Toronto CMA underscore the significance of this growth between 1991 and 2001.13 While employment in all industries grew at an average annual rate of 2.4%, job growth in professional, scientific and technical services as a whole was 5.2%. Within this broad group, the management, scientific and technical consulting subsector grew at an annual rate of 6.2%. Scientific R&D services expanded at an average rate of 6.3% a year. Computer systems design services grew at an astonishing 12.2% per year. In related areas of business services, the rates were also impressive: 6.9% for employment services and 9.8% for other business support services.

Employment growth in the Toronto CMA was also well above average in communications and transportation and distribution services. For example, employment in telecommunications services grew by 8% annually; for warehousing and storage, the figure was 7.9%; for other support activities for transportation, 8.8%. Meanwhile, in services industries more closely tied to local population growth, growth rates were more modest. For example, retail trade grew at an annual rate of 2.6%.

Similar, though more muted, transitions have taken place in all of the major urban centres in the Central Zone (where the persistence of manufacturing activity has slowed the relative decline of the goods-producing sectors).

12. M.S. Gertler, A Region in Transition: The Changing Structure of Toronto's Regional Economy.
13. Toronto Economic Development, Toronto CMA 2001 Industry Profiles, City of Toronto, 2002.