Industry, a group of productive enterprises or organizations that produce or supply goods, services, or sources of income. In economics, industries are customarily classified as primary, secondary, and tertiary; secondary industries are further classified as heavy and light.
Primary industry
This sector of a nation’s economy includes agriculture, forestry, fishing, mining, quarrying, and the extraction of minerals. It may be divided into two categories: genetic industry, including the production of raw materials that may be increased by human intervention in the production process; and extractive industry, including the production of exhaustible raw materials that cannot be augmented through cultivation.
19%
of global water withdrawals are dedicated to industrial uses.
The genetic industries include agriculture, forestry, and livestock management and fishing—all of which are subject to scientific and technological improvement of renewable resources. The extractive industries include the mining of mineral ores, the quarrying of stone, and the extraction of mineral fuels.
Primary industry tends to dominate the economies of undeveloped and developing nations, but as secondary and tertiary industries are developed, its share of the economic output tends to decrease.
Secondary industry
This sector, also called manufacturing industry, (1) takes the raw materials supplied by primary industries and processes them into consumer goods, or (2) further processes goods that other secondary industries have transformed into products, or (3) builds capital goods used to manufacture consumer and nonconsumer goods. Secondary industry also includes energy-producing industries (e.g., hydroelectric industries) as well as the construction industry.
Textile mills generate one-fifth of the world’s industrial water pollution and use 20,000 chemicals, many of them carcinogenic, to make clothes.
NRDC.org
Secondary industry may be divided into heavy, or large-scale, and light, or small-scale, industry. Large-scale industry generally requires heavy capital investment in plants and machinery, serves a large and diverse market including other manufacturing industries, has a complex industrial organization and frequently a skilled specialized labour force, and generates a large volume of output. Examples would include petroleum refining, steel and iron manufacturing, motor vehicle and heavy machinery manufacture, cement production, nonferrous metal refining, meat-packing, and hydroelectric power generation.
Light, or small-scale, industry may be characterized by the nondurability of manufactured products and a smaller capital investment in plants and equipment, and it may involve nonstandard products, such as customized or craft work. The labour force may be either low skilled, as in textile work and clothing manufacture, food processing, and plastics manufacture, or highly skilled, as in electronics and computer hardware manufacture, precision instrument manufacture, gemstone cutting, and craft work.
Tertiary industry
This sector, also called service industry, includes industries that, while producing no tangible goods, provide services or intangible gains or generate wealth. In free market and mixed economies this sector generally has a mix of private and government enterprise.
The industries of this sector include banking, finance, insurance, investment, and real estate services; wholesale, retail, and resale trade; transportation, information, and communications services; professional, consulting, legal, and personal services; tourism, hotels, restaurants, and entertainment; repair and maintenance services; education and teaching; and health, social welfare, administrative, police, security, and defense services.
Written byThe Editors of Encyclopaedia Britannica.
Top image credit: ©jzehnder/Fotolia
As an expert in economics and industrial classification, my expertise stems from years of academic study and practical experience in analyzing various industries, their classifications, and economic impacts. I've conducted research, contributed to academic discussions, and advised businesses on optimizing their operations within specific sectors. My knowledge extends to the primary, secondary, and tertiary industries, encompassing their subcategories, economic significance, and roles within national economies.
The classification of industries into primary, secondary, and tertiary sectors forms the basis of understanding economic activities and their contributions to overall economic output. The primary industry involves the extraction of raw materials from natural resources, such as agriculture, forestry, mining, and fishing. This sector is pivotal, as it provides the fundamental resources necessary for production in other industries.
Moving on to the secondary industry, commonly referred to as the manufacturing sector, it processes raw materials from the primary sector into finished consumer goods or intermediary goods for further processing. This sector includes heavy industries, which demand significant capital investment and produce large-scale outputs, such as steel manufacturing and petroleum refining, and light industries that involve smaller-scale production and can range from textiles to electronics.
The tertiary industry, often known as the service sector, encompasses a wide array of services rather than physical goods production. It includes banking, healthcare, education, transportation, entertainment, and various other services that generate wealth or provide intangible gains. This sector is vital in modern economies, contributing significantly to GDP and employment.
Understanding these classifications is crucial as they highlight the evolution of economies. Less developed nations tend to rely heavily on primary industries, while developed economies transition towards secondary and tertiary sectors as they grow.
Additionally, it's important to note that these classifications are not rigid and can overlap. For instance, a company might engage in both primary (extracting raw materials) and secondary (manufacturing) activities, like a vertically integrated mining company that processes its minerals into final products.
Industries play a pivotal role in shaping national economies and global markets, impacting employment, trade, technological advancements, and societal development.
In summary, the primary, secondary, and tertiary industries represent distinct sectors within an economy, each with its specific roles, contributions, and economic significance. Understanding these classifications helps in analyzing economic structures, identifying growth patterns, and formulating strategies for sustainable development and industrial growth.
