Some Theoretical Models on Economic Sector Structure Shift

to the absolute advantage in the international division of labor of economies. However, to promote the economic restructuring in the process of industrialization and modernization, policy efforts towards upgrading science, technology and engineering to transform them from raw product suppliers to processed industrial products will be a key content to note.

- Human resources

Human resources, when considered as an input factor of the production process, have long been considered a decisive factor for the production process. At certain times, how to allocate these resources is very important for the formation of the economic sector structure of the economy. To decide how to allocate human resources to different production sectors, it is necessary to pay attention to the following aspects:

First, the scale of human resources

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The size of human resources is one of the important factors contributing to the formation of the economic sector structure. In order for production and business activities to achieve economic efficiency according to scale under certain scientific and technological conditions, an appropriate amount of labor is required. For some countries, the small size of population and labor force is one of the reasons for the difficulty in development in some fields. On the contrary, many developing countries have a phenomenon of "surplus" labor. Therefore, forming a "full employment" economic sector structure is one of their top priorities. From an economic perspective, the size of human resources depends not only on the size of the population living in a certain territory or administrative unit, but also on the mobility of the labor force, which is determined by traffic conditions and the flexibility of the labor market.

Second, the quality of human resources

In addition to health, character and ethics (diligence, diligence, love of work, responsibility for work, high social self-esteem, labor discipline, etc.), labor quality is also reflected in the level of skills, labor skills and knowledge (including professional knowledge and other necessary social knowledge). Therefore, for human resources, labor quality is the most important to form the economic structure, especially for industries and fields that require trained, highly skilled workers such as some service fields associated with modern technology, mechanical engineering, electronics, chemistry, etc. For its part, labor quality is the product of the education and training process. Therefore, economists have demonstrated that investment in education is a direct investment in production, not an investment in the social sector, which is only considered after investment in production sectors as in most economic reports and statistical classifications.

Third, demographic trends

The trend of demographic change is quite important for the formation of the structure of the economy. This factor is expressed in both supply and demand aspects. In terms of supply, the trend of population change will determine the trend of change in the social labor force. The trend of demand change will significantly affect the scale and structure of market demand.

- Capital

The scale of investment capital is an important economic factor that always directly affects the process of economic restructuring of each country. Capital is always a difficult problem for most developing countries in the process of growth and economic restructuring. Nowadays, the process of economic globalization is taking place extensively on a global scale,

The rapid and large-scale increase in global investment flows has helped alleviate this problem for developing countries. However, the lack of capital in these countries remains a persistent problem. Therefore, determining the economic sector structure cannot ignore the economy's ability to mobilize capital. Due to limitations in scale and large dispersion, businesses will focus more on investing in sectors that require less investment capital and have the ability to recover capital quickly, such as small-scale retail trade (small traders), textile and garment industries, agricultural product processing, providing daily services, etc.

However, the impact of capital factors on the formation of economic sector structure of developing economies in today's era is not that simple. The impact of globalization and the nature and extent of state intervention in the economy, first of all through investment policy, have a very important meaning for the transformation of economic sector structure. Foreign capital flows together with domestic capital flows into specific business sectors largely depend on the economic policy of the state. In addition to the state budget capital directly invested in a number of sectors, policies to encourage or discourage investment in a number of sectors also contribute significantly to the direction of capital flow into different sectors and industries.

1.2.2.3. Institutional environment

Institutions are understood as human-made constraints that regulate the structure of interactions between people. Political and social institutions are recognized to have an impact on the development process of a country, especially through creating legal corridors and investment environments. Because the foundation of a market economy is based on exchanges between individuals and groups of people, without institutions, these activities cannot take place because

One person cannot interact with another if there is no sanction to prevent the other from acting arbitrarily and contrary to the agreement. Individuals and businesses can only buy, sell, lease contracts, invest if they have a certain level of confidence that their contractual agreements will be implemented. Usually, individuals often do not have enough information when participating in transactions. Therefore, there will be costs arising called transaction costs. All these costs are related to institutions. A bad institution will make the cost of enforcing contracts high and thus will not encourage economic transactions. Moreover, a good institutional structure will create certain incentives, decisively affecting the allocation of human resources for good or bad economic growth. According to the authors Knack and Keefer (1995), to assess the quality of institutions, four criteria can be used to measure: (1) Corruption,

(2) Quality of administrative apparatus, (3) Compliance with law, and (4) Protection of property rights.

The institutional environment is a decisive factor in the formation and transformation of economic structure, first of all the economic sector structure. It is often closely linked to the political regime and economic development guidelines. The institutional environment is a concrete expression of each viewpoint, idea and behavior of the state that intervenes, orients the overall development as well as the development of the constituent parts of the economy through the tools that the state issues and uses such as economic policies, legal systems, etc.

Policy mechanisms have a very strong impact on the general trend of economic structure formation and transformation, including industry structure, regional structure and economic component structure. For example, for a long time under the centralized planning mechanism, the general trend of economic structure formation in Vietnam was "prioritizing the development of heavy industry". In a more extreme form, campaigns such as China's "everyone makes steel"

National in the 60s - 70s. From this direction, the largest part of Vietnam's national resources in a long period was also devoted to the development of heavy industry. Another policy in the early 1980s was "three major economic programs: food - foodstuff, consumer goods and export goods". The economic structure was adjusted because resources were reallocated in a direction that gave more priority to these economic programs.

1.2.2.4. Scientific and technological progress

The achievements of the scientific and technological revolution, especially the explosion of information technology, have created leaps in all fields of production, contributing to accelerating the process of economic restructuring of countries, because information quickly makes production and business adjustments more responsive and reasonable, leading to changes in production structure that are more suitable to the market and interests of each country. On the other hand, when science and technology develop, many new industries will appear and promote the strong development of some industries that previously did not have the conditions to develop. For example, in recent years, the strong development of science and technology has promoted the development of some high-tech industries such as electronics, software industry, new materials industry, etc. The development of science and technology also allows the exploitation of some resources that were previously unexploitable or not economically efficient to exploit, so it also has a significant impact on the economic restructuring of industries.

In short, the process of economic restructuring is affected by many factors. In the current conditions, under the impact of globalization, marketization and rapid progress in science and technology, these factors themselves are constantly changing and contain economic contents that are not entirely the same. Therefore, when assessing the impact of each factor as well as the combined impact of these factors, it is necessary to look at

perceive them as dynamic processes to examine long-term trends in the structural transformation of the economy.

1.3. Some theoretical models on economic sector structure transformation

1.3.1. Method of implementing industry structure transformation - Rostow model

In his book "Stages of Economic Development", the famous American economic historian Walter W. Rostow gave a historical synthesis of the initial steps of modern economic development in 6 continents. According to the Rostow model, the economic development process of each country is divided into 5 stages and corresponding to each stage is a typical economic sector structure that reflects the nature of development of that stage.

Stage 1: Traditional Society

The basic characteristics of this period are: the economy is dominated by agricultural production, labor productivity is low due to production mainly using manual tools, and accumulation is almost zero. The economic structure in this period is still purely agricultural.

Phase 2: Take-off preparation phase

During this period, scientific and technical knowledge began to be applied to production in both agriculture and industry; education was expanded and improved to meet new development requirements; increased investment demand promoted banking activities and the emergence of capital mobilization organizations. Then, the development of domestic and foreign trade promoted the activities of the transportation and communications industries. The economic structure during this period was agricultural and industrial.

Phase 3: Take-off Phase

This term implies a country entering a stage of modern and stable development. The basic factors ensuring take-off are: mobilizing necessary investment capital, increasing the savings rate to at least 10% of the pure national income. In addition to domestic investment capital, foreign investment capital plays an important role, science and technology have a strong impact on agriculture and industry, industry plays a leading role, has a fast growth rate, brings in large profits, profits are reinvested in production development, through the need to attract workers, stimulate the development of urban areas and service sectors. The economic structure of this stage is industry - agriculture - services.

Stage 4: Adult Stage

The basic characteristics of this period are the continuous increase in investment rate, up to 20% of pure national income; new science and technology are applied in all aspects of economic activities; many new and modern industries develop; agriculture is mechanized, achieving high labor productivity; import demand increases sharply, domestic economic development flows into the international market. The economic structure in this period is industry - service - agriculture.

Stage 5: High Consumption Stage

During this period, there were two basic economic trends: first, per capita income increased rapidly, the wealthy population led to an increase in demand for sophisticated, high-end goods and services; second, the labor structure changed towards an increase in the proportion of urban population and skilled, highly qualified workers; the economic sector structure during this period was service - industry.

Rosow's model, although still limited in terms of the basis of segmentation in economic development as well as the consistency of the characteristics of each

stages compared to reality, but from the perspective of the relationship between industry structure transformation and the development process, this model has shown a reasonable choice of industry structure corresponding to each certain stage of each country.

1.3.2. Arthur Lewis's two-sector model

The main feature of this model is the division of the economy into two sectors, industrial and agricultural, in a dual economy and the study of the movement of labor between the two sectors. The agricultural sector, at its level of existence, has surplus labor and this surplus labor gradually moves to the industrial sector. The development of the industrial sector determines the growth rate of the economy, depending on the ability to absorb the surplus labor created by the agricultural sector, and that ability depends on the rate of capital accumulation of the industrial sector.

Thus, Lewis's two-sector model defines a way to solve the relationship between industry and agriculture in the process of achieving growth and development goals. This model is built on the basis of the ability to shift labor from agriculture to industry according to the capital accumulation capacity of this sector. The model shows that when the agricultural sector has surplus labor, economic growth is determined by the accumulation and investment capacity of the industrial sector.

However, this model also has significant limitations. The assumptions may not be consistent with reality. First, the model assumes that the rate of labor absorbed from the agricultural sector corresponds to the rate of capital accumulation in this sector. In reality, when capital is available, the industrial sector can invest in capital-intensive industries or find more profitable investment abroad, and thus the meaning of solving employment for the agricultural sector is no longer there. Second, the model assumes that only the rural sector has surplus labor.

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