Different Types of Industries: Meaning, Classification and Differences
Different types of industries form the backbone of a country's economy. They share an interdependent relationship - while a country's economy depends on the industry's performance, industries are equally dependent on a country's economy.
Goods and services are primarily produced or manufactured by three different kinds of industries - primary, secondary and tertiary. You will learn about these industries in detail and how they differ from one another in the following article.
What Is Primary Industry?
As the name suggests, primary industry forms the base for the other two types of industries. This industry is concerned about extracting raw materials and products from nature which will later go through modifications to produce the final products and services for consumers or customers. It is the most important segmentation in the industry ladder as without this, others would not exist.
Primary industry is heavily dependent on natural resources and raw materials. This is of more significance in developing countries than in developed countries. Agricultural, mining, fishing, etc. are all parts of the primary industry.
What Types of People Work in the Primary Sector?
Workers, who are also known as "red-collar workers", form the backbone of the primary industry. This industry wholly depends on farmers, fishermen, hunters and miners.
What Percentage of the Workforce Is Employed in the Primary Sector?
As per the latest studies, around 48.9% of the workforce is employed in the primary sector. As India is a developing country, its dependence on the primary sector is higher than the other two sectors. Around 43% of the workforce is men, and 62.8% are women.
How Can the Primary Industry Be Classified?
Depending upon resources and materials, the primary industry can be classified into the following sectors:
Agriculture
Agriculture makes up most of the primary industry. Farmers are the pillar of this sector. Based on the goods produced, this sector is further divided into four more categories – food, textiles, raw materials and fuel.
Aquaculture
The fishing industry consists of a widespread business involving various tasks such as selling, shipping, marketing, preserving and processing fish products. Fishery is the world's fastest-growing food-producing industry, and it is predicted to grow byA. It also provides for almost half of the world’s edible seafood products.
Forestry
Forest holds abundant resources and supplies raw materials for various purposes. It contributes significantly to the national economy as well as global economy. From a very small necessity such as rubber to large household necessities such as wood for furniture, the forest industry is an important aspect of everyone's life.
Mining
This sector of the primary industry digs deeper than the soil. Its activities include extraction of raw materials from beneath the surface. Oil, minerals, gemstones, metal etc., are derived through the process of mining.
What Is Secondary Industry?
Secondary industry is built on the raw materials and products accumulated through the primary industry. Manufacturing and construction are two main parts of this industry. This industry is mostly responsible for making our everyday life easier. It utilises a lot of energy as heavy machinery and tools are used.
However, this industry also impacts the environment heavily because of the waste produced from these industries.
What Percentage of the Workforce Is Employed in the Primary Sector?
In India, about 50-60% of the population is employed in the primary sector.
What Are the Classifications of the Secondary Industry?
.The secondary industry has the following segmentations depending on factories and materials:
Manufacturing
Various types of manufacturing industries come under this classification, such as automobiles, aircraft, electronics and housewares.
Construction
Construction industry includes building, renovating and repairing buildings and structures.
Consumer products
This is one of the primary sub-sections of the secondary industry. From food items to office supplies, this category has the widest range of goods and products available.
Art, Craft & Fashion
Footwear, clothes and handicraft items also come under secondary industry. This sector procures the raw materials from the primary industry and manufactures products for the end consumers.
What Is the Tertiary Industry?
Tertiary industry is the service-oriented sector among the three types of industries. It can be said that the goods produced in the previous two sectors are utilised in this sector to provide services. The total percentage of workers in this sector is about 26.8%
Tertiary industry maximises productivity and potential by combining expertise, knowledge and services with the tools and products produced through primary and secondary industries.
The tertiary industry mostly consists of administrative services, transport, real estate activities, personal services, health, education and social work
What Are the Differences Between Primary, Secondary & Tertiary Industries?
Concepts of the various types of industries will become even more transparent through the differences discussed in the given table:
Parameters | Primary Industry | Secondary Industry | Tertiary Industry |
What does it include? | Essentially includes the agriculture and fishing industry. | Majorly consists of the manufacturing sector. | Wholly service-oriented industry. |
Supplies | Supplies raw materials for manufacturing and construction. | Converts raw materials into useful products and goods. | Utilises the products and tools produced through services. |
Employment | The employment ratio in this industry is higher as India is a developing country. | Employment ratio is moderate in this sector as it requires special skills and expertise. | Employment is growing swiftly in this sector. |
Organisation | This sector is the least organised as it employs conventional methods. | This sector is comparatively more organised as more efficient and contemporary techniques are incorporated. | This is the most organised among the three types as it utilises sophisticated processes |
As per the thorough description given above, it is clear that the three different types of industries are interdependent on each other. While secondary and tertiary won’t exist without primary, the primary has no purpose without the presence of the other two.
FAQs about Life Cycle Costing
Who are referred to as “red-collar” workers in the primary industry?
People involved in primary production activities of natural products are called “red-collar” workers due to their outdoor nature of work. They are skilled professionals in the sectors of agriculture, fishing, forestry, etc.
Which type of industry has growing employment opportunities?
Out of the three types of industries, the tertiary industry has been seeing a rapid increase in employment opportunities in recent times.