Economic Activities
Prepared by Rachel Farrell
The Sectors of the Economy
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Primary Sector – Extractive Industry
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Secondary Sector – Construction &
Manufacturing
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Tertiary Sector – Service Sector
Primary Sector
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Also known as extractive insdustry.
Turns natural resources into raw
materials for use in secondary
sector.
e.g. agriculture, forestry, fishing,
mining.
Agriculture
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Produces meat, milk, cereals &
horticultural output.
1/3 of the largest firms in Ireland
use agricultural output such as
milk & beef in their products.
Problems with agriculture
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Climate: Bad weather distroys crops.
Output: Overproduction leads to low prices
- milk quotas and single farm payments
restrict the amount of milk & beef that can
be produced in order to keep farm incomes
higher.
Disease: Foot & Mouth, BSE, Salmonella,
Bird Flu…………
Forestry
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Forests in Ireland mostly owned by
Coillte (one million acres)
They are involved in tree plantation
& timber processing ……
Problems:
 Forestry drains nearby soils of vital
nutrients.
 Land used in forestry cannot be
used for animal rearing.
Fishing
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BIM is the Irish Fisheries Board.
They promote the fishing industry.
Fish is caught and sold fresh, processed or
frozen.
Salmon farming is on the increase.
Problems:
 Overfishing – depletion of fish eg. Cod
 EU quotas – limits put on fishing
 Competition from large European fleets.
Mining
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Tara mines – zinc & lead (exported)
Monaghan – gypsum (plasterboard)
BNM – peat (generates electricity,
fuel, peat moss……)
Problems:
 World demand for zinc is falling.
 Closures of some mines.
 Mining damages the environment.
Secondary Sector
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The manufacturing &
construction sector of the
economy.
It turns raw materials into
finished products.
3 Main Groups
1.
Transnationals (TNC’s)
2.
Agri-business
3.
Indigenous Firms
Transnationals (TNC)
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Large business with headquarters in one country
and branches in many others.
May move operations from one country to another
in response to market conditions.
IDA offers incentives to foreign TNC’s to set up
here.
e.g. INTEL, IBM, Coca Cola, Nestle, Unilever……….
Unilever
Agri-business
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Turns produce from agriculture into food products, e.g.
Glanbia plc.
Opportunities:
Access to new markets of Eastern Europe.
Produce GM free, organic, clean food.
New product ideas, yogurt drinks …..
Challenges:
Competition from other countries.
Powerful multiple stores dictating prices & credit terms.
Indigenous Firms
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Set up in Ireland by Irish people.
Helped by Enterprise Ireland & County Enterprise
Boards.
Advantages:
Loyal to the country.
They foster an enterprise culture.
Profits remain in Ireland and reinvested in new
businesses.
Challenges :
Competition
May depend on TNC’s.
To ensure success the secondary Sector
needs to:
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Produce high quality goods.
Export, find new markets.
Invest in capital & R & D.
Avail of advice & grants from
Enterprise Ireland (indigenous) IDA (TNC’s).
Adopt World Class Manufacturing (WCM)
(TQM, Empowerment & Quality Control).
Tertiary Sector
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Service Sector.
Provides support services for the
extractive & manufacturing sectors and
to consumers.
e.g. finance, insurance, medical,
beauty, recreation………
It is the last to develop, but eventually
becomes largest employer.
Why is the tertiary sector the
fastest growing sector?
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Economic development = increased wealth.
Increased wealth = increased demand for services.
Expansion of Public Sector = more jobs in health
education ….
Expansion of business = need for support services.
International trade in services such as IT &
finance.
The 4 stages in the
development of the economy,
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Decline in agriculture as technology
improves.
Growth in construction & manufacturing.
People move to non rural areas to live.
Growth in service sector to support the
growth in manufacturing & construction.
Globalisation of services facilitated by
developments in ICT.
Contribution of the three
sectors of the economy
Primary Sector
 Provides raw materials for secondary sector.
 Provides approximately 10% employment,
tax etc..
 Pump a lot of money into the Irish economy
by purchasing machinery and consumables
for their business.
 Export a lot of produce.
Secondary Sector
 Consume Irish raw materials e.g. Ribena.
 Provides appproximately 25% employment,
tax..
 Export a lot of their produce.
 Encourages the development of indigenous
firms.
Tertiary Sector
 Provides support services for the primary &
secondary sectors.
 Employs approximately 65% of work force,
tax..
 IFSC attracts half of the worlds top 50 banks
& half the worlds top 20 insurance co.’s.
 Invisible exports such as call centres provide
Ireland with more wealth.
Important trends & issues in
the main industries in Ireland.
Primary
 Quotas, organic food, provision of sustainable
energy to reduce dependence on oil, more forests.
Secondary:
 IT TNC’s coming to Ireland, Manufacturing TNC’s
leaving Ireland (FOTL), major infrastructural
improvements, slowdown in construction.
Tertiary
 Huge increase in services supplied.
 Invisible exports such as call centres,
software development, finance…..
 Foreign banks and insurance companies
locating in International Financial Services
Centre in order to have access to EU market.
4 Factors of Production
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Land
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Labour
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Capital
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Enterprise
Land
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All things supplied by nature.
Natural resources used in
production.
e.g. fields, water, natural gas,
oil, coal, minerals, trees……..
The payment/reward for land is
rent.
Labour
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The human element in the
production process.
e.g. employees, builders,
carpenters, factory workers…..
The reward for labour is wages.
Capital
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All man-made things that help
produce goods.
Money is invested to buy things
such as buildings, machinery…
The reward for capital investment
is interest.
Enterprise
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Entrepreneur taking the initiative
and risk to set up a new business.
e.g. Ramona Nicholas, Richard
Branson…
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The reward for enterprise is profit.
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The risk of enterprise is loss.