Categories of Industry
Unit 6
Categories of Industry
• Primary sector
▫ Extractive industries
• Secondary sector
▫ Manufacturing and construction
• Tertiary sector
▫ Service industry
Primary Industries
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Agriculture
Forestry
Fishing
Mining
Power generation
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Wind power
Solar
Gas
biofuels
What is industry?
Definition:
Industry is all companies that make up full output
of a produce or service
• Economy is formed of different industries
▫ Primary or extractive: natural resources
▫ Secondary: construction and manufacturing
▫ Tertiary or service
(e.g. hotels, government & professional services)
The Primary Sector
• The importance of the primary sector to the
economy
▫ In 2011, almost 150,000 people were directly
employed.
▫ These employees pay tax on their wages and VAT
on purchases.
▫ Raw materials for industry. E.g. Coillte
▫ Exports from agriculture are high, which impacts
the balance of trade and payments.
▫ Food products produced cut down on imports
from abroad.
Primary industries
• Products extracted from natural resources (farming, fishing, forestry &
mining)
• In 2011, employed about 8% of the workforce
• Good for balance of trade and balance of payments
(reduce imports & increase exports)
• Receive financial support from EU to help with competitiveness
• Agriculture/Agri-business
▫ Volume of exports, major employer in Ireland
• Forestry
▫ Timber, Coillte, Bord na Móna, Bio-Energy Ireland
• Fishing
▫ Reduced size of industry in Ireland, leading Irish ports include
Killybegs & Howth
Changing trends in the Primary Sector
• Declining numbers employed in agriculture.
• EU quotas on food production.
• Increase in demand for organic and artisan food
products.
• Diversification of land towards sustainable
energy or forestry.
• Decline in EU grants – Common Agricultural
Policy.
• The secondary sector involves taking the raw materials from the primary
sector and processing them into finished products.
• Involves:
•
Manufacturing sector
• Indigenous firms
• Transnational firms
• Agri-business
• Construction sector.
Secondary industries
• Construction industry
▫ Building roads, bridges, schools and hospitals
▫ Barometer of economy, badly affected by recession
▫ In 2011, 74,000 jobs in construction
• Manufacturing industry
▫ Finished products from raw materials
(e.g. computers, clothing and pharmaceuticals)
▫ High-tech industry that is globally competitive
• Jobs in secondary sector down 20% since 2009
• Sales of Irish goods under threat as cheaper imports become available
• Wage levels in Ireland resulted in some firms moving to countries with
lower costs
The Secondary Sector
• The secondary sector involves taking the raw
materials from the primary sector and
processing them into finished products.
• Involves:
▫ Manufacturing sector
 Indigenous firms
 Transnational firms
 Agri-business
▫ Construction sector.
Importance of the Construction
Industry in Ireland
• Employment
▫ Construction industry employs a large number of
workers. These workers contribute tax revenue to
the government.
• Uses Irish raw materials.
▫ Raw materials from the primary sector are used in
this stage which decreases reliance of imports.
• Exports
▫ Much of what is produced is exported, which
contributes to the balance of payments.
Changing trends in the secondary
sector
• Fall in employment
▫ Massive increase in factory closures and job losses
in recent years.
• Increased competition.
▫ EU competition rules have encouraged new
entrants into the markets.
• Increased wages
▫ Wage increases over the past decade have made
Irish workers expensive in relation to the rest of
the world.
Tertiary Sector
The Tertiary sector (or services sector) provides
services to individuals and to other businesses
• Service industries and services sector
▫ Employs almost 70% of people in Irish economy
▫ Examples: banks, accountants, doctors,
train drivers and government services
• 90% of Irish businesses are in the service industry
Importance of the Tertiary sector
• Employment
▫ The sector is labour intensive and creates many jobs
• Support services
▫ The sector provides support services for the efficient running of
all other sectors of the economy
• Tax revenue
▫ Many small, indigenous businesses are involved in providing
services, contributing large amounts of tax to the government
through PAYE, VAT and corporation tax.
• Tourism
▫ Tourism is a very important service industry and a big employer.
Tourists spend large amounts of money in Ireland
Trends in the Tertiary sector
• Exporter of services
▫ Ireland is one of the world’s leading exporters of software-related
goods and services. This brings money into the country.
• E-Commerce
▫ In relation to information communication technology (ICT)
infrastructure – firms in Ireland generate almost one-third of
their turnover from e-commerce.
• Job losses
▫ Banks and financial institutions have reduced the number of staff
they need. Mergers and acquisitions are common in this industry
now.
• ICT
▫ Massive expansion due to developments in ICT
Factors of production
• Four factors of production:
 The resources available to produce consumer goods
 Together they govern the standard of living
• Land
 Fixed supply, includes mineral resources
• Labour
 Size and age of population, skilled or unskilled
• Capital
 Finance, machinery and equipment used in business
• Enterprise
 Ideas, money and ability for new businesses