Service sector employment to overtake agriculture's in 2020

Md Saleh Ahmed joined a media house after graduating from Dhaka University. His father and forefathers were all farmers based in Narayanganj. But, Saleh broke the family chain and became a service-holder.

Just like Saleh, many youths from the agricultural background are now choosing the service sector.

According to the World Employment and Social Outlook, a statistics published by the International Labour Organisation (ILO) recently, the Bangladesh service sector will dominate the agricultural sector in 2020.

Bangladesh is predominantly an agricultural country where the sector plays a vital role in accelerating the economic growth. It has proudly dominated both the service and industry sectors up to 2019.

Dr Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), said, "Incremental growth in agriculture is lower than service and industry sectors. As a result, more job opportunity has been created in service and industry sectors."

Statistics revealed that the last decade saw the start of a decline in the employment gap between the agriculture and service sectors. As a result, in 2019 the employment in the service and agriculture sectors both reached 27.3 million, according to ILO statistics.

The industrial sector also saw a sharp rise in employment but is still behind the agriculture sector. However, the employment gap between the two sectors is declining gradually, the statistic added.

This takeover can be attributed to the decline in male employment in the agriculture sector since 2010.

The ILO revealed that male engagement in Bangladesh agriculture has decreased by 2.1 million in the last decade. In 2019, male engagement in the sector was 15.1 million.

On the other hand, male employment in the service and industry sectors rose by 5.6 million in the same period.

In 2010, male employment in the service sector was 16.7 million, whereas in 2019, it hit 22.3 million.

According to ILO forecasts, male engagement in service sector will reach 22.8 million this year.

On the other hand, male employment in the industry sector grew by 2.6 million in the last decade, ILO statistics said.

In 2010, the industry sector employed 8.1 million males, which increased to 10.7 million in 2019. It is expected to hit 10.9 million this year, the ILO predicted.

In addition, female employment is also rising, with most number of women employed in the agriculture sector. Although a significant number of women are employed in the RMG industry, the industry sector employs the lowest number of women, compared to the other two sectors.

However, the total percentage of female employment in the agriculture sector declined in the last decade. In 2010, 66 percent female worked in the agriculture sector, which fell to 59 percent in 2019.

Meanwhile, the industry sector saw 4 percent rise in female employment, while the service sector saw a 3 percent surge in the last decade.

According to the Labour Force Survey 2016-17 by the Bangladesh Bureau of Statistics, the number of service holders in service and industry sectors surged between 2010 and 2017.

The survey report stated that the total employment in the service sector rose by 4.7 million in this period. However, total employment in the agriculture sector dropped by 0.9 million in the same period.

This also means employment in the agriculture sector dropped by 6.7 percent, while employment in the service sector rose by 3.9 percent between 2010 and 2017. In the same period, employment in the industry sector rose by 2.8 percent.

This scenario can be explained by "Walt Rostow's Five Stages of Economic Growth Model".

According to the theory of the renowned economist, economies of all countries could be placed within one of five different stages of economic growth including traditional society, preconditions to takeoff, takeoff, drive to maturity, and age of high mass consumption.

Bangladesh is on the "takeoff" stage, where the agriculture sector has less importance, though more people are employed in the agriculture sector.

According to the World Bank Human Capital Index, Bangladesh is improving slowly. Since 2009 the expected years of schooling rose by 2.4 years, the report says, adding that girls are dominating their male counterparts at schools. As a result, the total employment rate in the service sector is rising.

Talking to The Business Standard, Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said economic transformation is overtaking the service sector from agriculture sector.

"It is true that employment in the service sector is increasing but there is a need for making the sector more organised, otherwise employees will face problems, as Bangladesh is mostly dependent on export oriented manufacturing sector," Dr Moazzem said.