Final answer:
Productivity improvements are not inherently more difficult in the service sector, as comparative advantages can influence productivity in different economies. Factors including unionization, outsourcing, and economic transitions notably impact productivity and economic development.
Step-by-step explanation:
The assertion that productivity is more difficult to improve in the service sector is false. Comparative advantages can lead to different levels of productivity between two economies, showing that improvement is possible in various sectors. It is noteworthy that with the transition to service industries in more developed economies, like the United States, we find service sector employment at nearly 80 percent. Sir W. Arthur Lewis' dual sector economy theory proposes that the marginal product of low-skilled workers is greater in manufacturing than in agriculture because the latter typically has fixed inputs with low marginal productivity for additional workers.
There is a misconception that countries with a high percentage of unionized workers have less growth in productivity due to strikes and other disruptions. However, other factors such as outsourcing, the transition of workforces from agriculture and manufacturing to service industries, and more, play a role in the complexities of economic development and productivity changes.