Service Indusrty

I often feel that most of the wealth creation these days is through services..Service industry is booming. Think who is benefiting from this??? Major service industries are IT, banking and Telecoms. these industries provide support function and does not result in any real production. The economic balance and sustainability can only be achieved, when the key sectors like Agriculture and manufacturing takes back seat. It is believed that doveloped economy will have major contribution of service industry in its GDP (in excess of 70%), as we see this trend in US and other developed economy. I feel that it is wrong and this equation of core sectors (Agriculture and Manufacturing) and support sector (Service industry) is not sustainable . A support function can never replace or supersede core function.

while postulating this, imagine what could be the extant of value added by these services, computing in case of IT industry, communication in case of telecoms and lending & transaction in case of banking.
If we take world as a unit economy (for simplicity of understanding), if service industry makes 70% percent of all monetary transactions it means 30 % of transaction results into real creation (production).
Now imagine a production unit where in out of total cost of production 30% is direct cost and 70% is indirect cost. Can you think of any efficient industry which would be having this ratio of costs. will that unit be sustainable will it be efficient???? while thinking this also understand that we are talking about a single unit so it implies in monopoly.

In order to have a stable and sustainable and economy the percentage contribution of agriculture, manufacturing and service industry would have to be aligned, for sustainability the percentage share of service industry will have to come down drastically.

Inflation, sub-prime, NPA and market crash would always be haunting such unbalanced economies.