| Summary: | The goal of the paper is to examine the hypothesis whereby a higher level of diversification in the structure of activities of a certain settlement indicates a higher level of its economic development. The absolute predominance of employment in the tertiary-quaternary sector in the total employment in Serbia’s municipal centres has been brought in correlation with their level of economic development. The nature of this interdependence has been the subject of a detailed analysis in this paper. Using the methods elaborated for the needs of this research, conclusions have been drawn indicating the emergence of a large number of centres where the quantitative prevalence of the tertiary-quaternary sector, along with the distinct incidence of employment in public services, is not accompanied by corresponding qualitative and quantitative changes that would result in a higher level of economic development. Insufficiently developed centres have been identified in order to facilitate decision makers to take proper and timely actions and enable relevant institutions and organisations to apply adequate measures to support balanced economic development. © 2021 Austrian Geographical Society. All rights reserved.
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