A country's economy is a combination of different types of industries. These industries are the core of the economic prosperity of a nation. They provide goods and services, generate revenue and create jobs for the people.
There are various categories of industries. Based on activities, they can be of three types. In the following sections, you will learn about what industry is, the major types of industries, Primary, Secondary and Tertiary and the differences between them.
Did you know? The Tertiary sector alone accounts for 53.89% of India’s Gross Value Added.
What Are Different Types of Industries?
Before diving into the types of industries, let's first understand what do we mean by an industry.
The industry is the collection or group of companies with similar business activities. Based on different criteria, there could be different industries, for example, cloth manufacturing, hotel industries, etc.
At the country's economic setup level, these industries are categorised into Primary, Secondary and Tertiary sectors.
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Primary Industry involves the economic activities that utilise natural resources like land, water, plants, etc. At the same time, Secondary Industry is a group of economic activities that add value to natural resources. Processes, manufacturing and construction add value. The third type is the Tertiary industry, which forms the major part of the Indian economy. The main economic activities in the tertiary industry involve production and transportation. In upcoming sections, let’s discuss each type and their differences in detail.
What is Primary Industry?
Primary industry plays a vital role in developing countries. It consists of agricultural-based activities and is also known as the Agricultural and allied sector. It utilises natural resources of the environment and produces crops, minerals, livestock etc. The products of the Primary industry become the input for the secondary industry.
In undeveloped and developing nations, primary industries are crucial for the economy. Many people are engaged in the primary sector because they don't have access to modern equipment. Whereas developed nations don't depend on primary activities and they use modern technologies; thus, activities are less labour extensive. The people engaged in this industry are also called red-collar workers. The Indian primary industry contributes around 21.82% of the Gross Domestic Product.
Types of Primary Industries:
The Primary industries can further be divided into two categories.
- Genetic industry: This relates to the growing of vegetables, fruits, fisheries, livestock management and so on. Through human intervention and the use of scientific methods, the quality and quantity of products are improved.
- Extractive industry: These industries obtain raw materials from the earth or nature and then clean and purify them. These products cannot be cultivated like genetic produce. For example, coal mining, extracting petroleum products etc.
Primary Industry Examples:
- Agriculture: Farming and related activities are covered in agriculture. It is the art of cultivating soil, growing fruits and vegetables and raising livestock.
- Fishery: It is raising and harvesting fish. It also includes the activity of catching and selling fish. This industry consists of large corporate companies with huge vessels and individual or small fishers.
- Forestry: The trees are harvested and cultivated for wood, timber, and raw material for various other processes. Wood becomes raw material for many secondary and tertiary activities.
- Mining: The huge mining companies are major players in the industry. They extract iron ore, minerals and other elements from the earth. Different techniques are used as per the requirement of the elements. A primary mining company can work in collaboration with secondary and tertiary activities.
- Animal Husbandry: The branch of agriculture deals with animal rearing. The animal is used for Milk, meat, wool, etc. Produce like milk becomes raw material for many dairy products. Animal husbandry includes the management, breeding, and raising of livestock.
What is the Secondary Industry?
Compared to the primary industry, the Secondary industry is complex and operates at a high level. They are value-adding activities. It includes industries that are involved in construction and manufacturing. These industries don't harvest or extract produce. They use the primary industry products as raw materials and manufacture different products that they deliver to the final consumer or the tertiary industry. The workers in the secondary industry are also known as blue-collar workers.
The secondary industry is further divided into the heavy and light industries.
- Light Industry: They require less capital, fewer quantities of raw materials and few fixed assets to operate. These products are small and easy to transport. One of the benefits is that they have a low impact on the environment. As they are small industries the outputs manufactured by them are less in quantity.
- Heavy industry: They are opposite of the light industry in investment and production. They manufacture heavy and large products in large quantities but require huge capital investments, more power consumption and more space to operate.
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Following are a Few Examples:
- Automotive industry: This is a heavy industry, including companies involved in designing and manufacturing automobiles and spare parts. It uses iron and steel as raw materials from the primary industry.
- Food processing: It is one of the most crucial industries. It includes both big and small manufacturers. The fruits, pulses, vegetables etc., are used as input in the food processing industry.
- Construction: It is the construction of residential houses, malls, bridges etc. This industry helps the nation in infrastructure development. It uses raw materials like concrete, wood, metal and glass.
- Clothing and textile: It is one of the important sectors of the economy. Textile companies work directly with the primary industry. They procure raw materials and convert them into fabrics.
What is the Tertiary Industry?
The previous two types were related to production and manufacturing, but the Tertiary industry is a service-based industry. This sector is not involved in production and manufacturing. Instead, it provides services that help in the development of the primary and secondary industries. Activities like banking, insurance, healthcare, transportation etc., are covered in tertiary Industries. The key feature is that they work closely with their final customer. The employees or workers of the tertiary industry are also known as white-collar workers.
Examples:
- Professional services: Some professions covered under the tertiary industry require special licences and certifications. These professions need expertise and knowledge to provide valuable services to customers. The professions are auditor, lawyer, engineers etc.
- Telecommunication: This sector includes companies that provide internet and telephone services. They provide transmission of voice, images, data, messages, signals etc. through cables, radio, internet and Television systems.
- Hospitality: These activities ensure good services to tourists and travellers. This sector includes hotel management, event management, travel and tour agency etc.
- Public health: They focus on improving and maintaining people's health. They use technologically advanced and sophisticated devices and equipment. There are public and private hospitals, individual doctors and organisations working in the public health care sector.
- Financial services: Banks, financial institutions, money lenders, and other payment platforms are covered under the financial sector. It includes lending loans, issuing bonds and mutual funds and property mortgages.
Differences Between Primary, Secondary and Tertiary Industries.
|
Points |
Primary industry |
Secondary industry |
Tertiary Industry |
|
Meaning |
They are agricultural activities that are focused on cultivating crops, rearing animals and extracting products from the earth. |
They procure raw materials from the primary industry and by applying different manufacturing processes produce new products for final consumption. |
They are service-oriented sector. |
|
Methods |
The methods employed in the primary activities are traditional and very basic. |
Different methods are used depending upon the size of the manufacturing unit. But it involves the use of advanced and sophisticated technology. |
They employ modern supply chain methods and techniques. |
|
The scale of operations |
They are medium to large-level operations. |
They generally operate at a large level. |
Tertiary companies can operate at all levels, from small to large. |
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Conclusion
This was all about the three types of industries of the economy. Now you can easily differentiate between primary, secondary and tertiary activities. All industries play a vital role in the economy. And for the development and growth of the nation, equal attention should be given to all.
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