Exactly this. Don't think of it as "moving to a service-based economy", think of it as "outsourcing manufacturing and resource extraction". They are two sides of the same coin, but people tend to only look at the one shiny side.

Like any race to the bottom, it works great until you hit the bottom. Only now you don't have any of the fundamental industry, and you've lost all of the domain knowledge of those industries. Short-term thinking is incredibly seductive.