Correct Option
The correct option is 2 only.
Explanation
The structural transformation of an economy refers to the shift in the contribution of different sectors-Primary, Secondary, and Tertiary-to the total production (GDP) and employment over time. This pattern, often described by the Fisher-Clark model, is historically observed in developed nations as they progress from agrarian societies to industrial and finally to service-based economies.
Statement-wise Analysis
- Statement 1 is Incorrect.
In the initial stages of development, the primary sector (agriculture and related activities) was the most important sector of economic activity in what are now developed countries. As methods of farming improved and the agriculture sector began to produce much more food than before, people could take up other activities, eventually leading to the rise of the secondary sector.
- Statement 2 is Correct.
Over a period of more than one hundred years, specifically in developed countries, a further shift took place from the secondary to the tertiary (service) sector. The service sector has become the most important in terms of total production. Most of the working people are also employed in the service sector. This is a characteristic feature of post-industrial economies.
- Statement 3 is Incorrect.
In developed countries, the majority of the workforce is currently employed in the tertiary (service) sector, not the primary sector. The primary sector employs a very small fraction of the population in developed economies due to high mechanization and technological advancement in agriculture.
Key Takeaway
Structural Transformation: Economies generally evolve from being agrarian (Primary dominant) to industrial (Secondary dominant) and finally to service-oriented (Tertiary dominant) in terms of both GDP contribution and employment share.