The main sectors of the economy are: Show
 Video on different sectors of economyPrimary sectorThe primary sector is sometimes known as the extraction sector – because it involves taking raw materials. These can be renewable resources, such as fish, wool and wind power. Or it can be the use of non-renewable resources, such as oil extraction, and mining for coal. Examples include:
In developing economies, the primary sectors tends to take a big share with many employed in agriculture and mining. In the 1920s, over one million people were employed in the UK coal industry. It was a key part of the economy. However, improved technology and the growth of other energy sources has seen a dramatic decline in this primary sector industry. Secondary sector The secondary sector makes and distributes finished goods.
The manufacturing industry takes raw materials and combines them to produce a higher value added finished product. For example, raw sheep wool can be spun to form a ball of better quality wool. This wool can then be threaded and knitted to produce a jumper that can be worn. Initially, the manufacturing industry was based on labour-intensive ‘cottage industry’ e.g. hand spinning. However, the development of improved technology, such as spinning machines, enabled the growth of larger factories. Benefiting from economies of scale, they were able to reduce the cost of production and increase labour productivity. The higher labour productivity also enabled higher wages and more income to spend on goods and services. More on: manufacturing sector Service / tertiary sectorThe service sector includes
The service sector is concerned with the intangible aspect of offering services to consumers and business. It involves retail of manufactured goods. It also provides services, such as insurance and banking. In the twentieth century, the service sector has grown due to improved labour productivity and higher disposable income. More disposable income enables more spending on ‘luxury’ service items, such as tourism and restaurants. More on: Reasons for the growth of the service sector Quaternary/knowledge sector
The quaternary sector is said to the intellectual aspect of the economy. It includes education, training, the development of technology, and research and development. It is the process which enables entrepreneurs to innovate better manufacturing processes and improve the quality of services offered in the economy. Without this growth of technology and information, economic development would be slow or non-existent. It is also known as the knowledge economy – this is the component of the economy based on human capital – IT, knowledge, education. It is primarily related to the service sector, but also is related to the high tech component of manufacturing. Change in the importance of different sectors A primitive economy will primarily be based on the primary sector – with most people employed in agriculture and the production of food. As an economy develops, improved technology enables less labour to be needed in the primary sector and allows more workers to produce manufactured goods. Further development enables the growth of the service sector and leisure activities. Change in UK economy Relative decline of UK manufacturing Other sectors of the economyQuinary sectorThe quinary sector is the part of the economy where the top-level decisions are made. This includes the government which passes legislation. It also comprises the top decision-makers in industry, commerce and also the education sector. Public vs Private sectorAnother division is between the public sector – government and the private sector – free market, individuals and business. The government is primarily concerned with services, such as health and education. However, the government could own key industries, such as coal mines were once nationalised in the UK. See: public vs private sector Digital vs Traditional economy
Another division is between the traditional sector – bricks and mortar shops and the digital economy – online sales. In practice, there is an overlap between the sectors, e.g. Traditional shops have embraced aspects of the digital economy, such as online sales. However, the digital part of the economy is becoming more pronounced with some businesses no longer having a physical presence on high street, but providing intangibles goods and services, such as Netflix. Related pages
Human activities which generate income are known as economic activities. Economic activities are broadly grouped into primary, secondary, tertiary activities. Higher services under tertiary activities are again classified into quaternary and quinary activities. Let us first understand the differences between the different sectors of the economy, so that it will be easier for us to understand the factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India). Primary activitiesPrimary activities are directly dependent on the environment as these refer to utilisation of earth’s resources such as land, water, vegetation, building materials and minerals. It, thus includes hunting and gathering, pastoral activities, fishing, forestry, agriculture, and mining and quarrying. People engaged in primary activities are called red-collar workers due to the outdoor nature of their work. Secondary activities
Limiter Period Offer: Enroll Now at get 40% OFF Enroll Now Secondary activities add value to natural resources by transforming raw materials into valuable products. Secondary activities, therefore, are concerned with manufacturing, processing and construction (infrastructure) industries. People engaged in secondary activities are called blue-collar workers. Tertiary activitiesTertiary activities include both production and exchange. The production involves the ‘provision’ of services that are ‘consumed. Exchange involves trade, transport and communication facilities that are used to overcome distance. Tertiary jobs = White-collar jobs. Quaternary activitiesQuaternary activities are specialized tertiary activities in the ‘Knowledge Sector’ which demands a separate classification. There has been a very high growth in demand for and consumption of information-based services from mutual fund managers to tax consultants, software developers and statisticians. Personnel working in office buildings, elementary schools and university classrooms, hospitals and doctors’ offices, theatres, accounting and brokerage firms all belong to this category of services. Like some of the tertiary functions, quaternary activities can also be outsourced. They are not tied to resources, affected by the environment, or necessarily localised by market. Quinary activitiesQuinary activities are services that focus on the creation, re-arrangement and interpretation of new and existing ideas; data interpretation and the use and evaluation of new technologies. Often referred to as ‘gold collar’ professions, they represent another subdivision of the tertiary sector representing special and highly paid skills of senior business executives, government officials, research scientists, financial and legal consultants, etc. Their importance in the structure of advanced economies far outweighs their numbers. The highest level of decision-makers or policymakers performs quinary activities. Quinary = Gold collar professions.
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What are the 5 primary economic activities?
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