The service sector,regional specialization,and economic growth in the Victorian economy

During the Victorian period there were substantial regional variations in employment in the service industries. Explanations of economic growth in this period have been dominated by the notion that it was industry-led. If that were so, service growth would be a function of industrial growth. Testing of this thesis by econometric methods suggested that industry provided a poor explanation for variations in services, and that the main explanation was provided by variations in income. This raised other questions, since income per head in the industrial areas was generally much lower than in the less industrialized and service-oriented south of England. There is an abundance of evidence to suggest that this service-oriented regional growth was not derived from industrial development but from international trade and finance together with the consumer spending of a wealthy landed society. There was thus a substantial element of economic and spatial dualism in the Victorian economy. The role of heavy industry in Victorian growth thus needs to be revised considerably downward, and the importance of services and the South East region in particular revised considerably upward. Indeed it is by no means sure that the industrial regions provided the principal stimulus to Victorian growth: the evidence of this study would suggest otherwise.