The proponents of the structural change model instead, focus on the mechanism by which underdeveloped countries transform their economies from a heavy emphasis on the traditional subsistence agriculture to a more modern, more urbanized and more industriallydiverse manufacturing and service economy. One of the earliest best known theoretical models of development that focused on this was W. Arthur Lewis (1950).
According to the Lewis model, the underdeveloped country consists of two sectors: a traditional, over populated rural subsistence sector characterized by zero marginal labour productivity, implying that some labour could be withdrawn from the sector without loss of output, and a highly-productive modern urban industrial sector into which labour from the subsistence sector is gradually transferred.