In 2012，the ratio of the value-added of Shanghai service industry to GDP is over 60 percent and reaches international standard of “service economy”. The shift-share method is used to decompose the change of the labor productivity of service industry of Shanghai during 2002—2011，and the results show that the effect of “structural prize” and “structural burden” exists，and the “prize” is stronger than the “burden”，that the inner structural adjustment is conducive to promoting total industrial labor productivity，but its impetus is limited，that the improvement of the labor productivity of the service industry mainly emanates from the improvement of each sub-sector labor productivity，however，market-oriented reform is its main impetus，that the industries with the rapidest growth of inner labor productivity mainly include producer service industry field，however，the growth effect in public service industry is at the lower-side，but the growth of labor productivity in financial industry in producer service industry is fastest. Thus，Shanghai should speed up the market oriented reform to promote the harmonious development of all sub-sectors of the service industry according to the respective development laws but should not unilaterally seek the industry structure changes.