1.4 Primary, secondary and tertiary activity

Types of business activity

1.        Primary sector

The first stage of production process, where resources are extracted nature. E.g.

·         extraction from land (mining, agricultural industries, forestry)

·         extraction from sea is fishing

2.        Secondary sector

The second stage of production process, where the raw materials are manufactured into finished goods. E.g. textile industry, food processing, construction industry, engineering, etc.

3.        Tertiary sector

It involves the provision of services. This sector also provides ancillary services to the first two stages. E.g. accountancy, education, banking, insurance, bus, air service, hairdressing, etc.

Interdependence

All the three sectors of economy are dependent on each other. E.g. in primary sector cereal farmers rely on bakers of secondary sector for the sale of wheat. The bakers of secondary sector may depend on the banks of tertiary sector for raising more finance.

Industrialization

The process of social and economic changes where agricultural society declines while manufacturing grows. It happens in developing nations like India, Bangladesh, China, etc.

De-industrialization

The process of social and economic changes where manufacturing declines while service sector grows. It happens in developed nations like Japan, UK, USA, etc.

Dynamics/Causes of de-industrialization:

1.      Developing nations giving fierce competition to manufacturing industries of developed nations.

2.      Consumers prefer to spend more on services than manufactured goods.

3.      In developed nations public sector enhances, therefore tertiary sector grows immensely.

4.      Technological advancement means new machines replacing employees, thus incurs a fall in employment.

N.B.  “Contribute your skill and knowledge in nation building”

Best Wishes!