Understanding the Industry

Because of the diversity of producers and businesses, they were categorized according to
industries based upon what they offer and provide consumers. Industry, a Latin word,
“industria,” which means diligence and hard work. It also refers to a group of manufacturers or
businesses that produce specific types of products or provide specific types of services. It can
also mean all phases and typologies of economic activity from extraction to service delivery.
Traditionally, there are three types of industries – primary, secondary, tertiary industry.
However, with the continuous development of technology and demand for higher intellect, a
type of industry was identified, the quaternary industry.
Primary industry consists of those that extract and harvest raw, natural produce from land or
sea. This includes agriculture, fishery, mining, forestry, and farming etc.
Secondary industry comprises of those that processes, manufactures, or constructs raw
materials into a new product either through the assistance of technology, machinery, or manual
labor. Examples of which are car industry, semiconductor industry, and appliance industry to
name a few.
Tertiary industry refers to those businesses that neither produce raw materials nor
manufacture products. Rather, these are those that provide services to both people and other
industries, such as retail services, healthcare services, transport services, hotel and tourism
services among others.
Quarternary industry includes those that provide personal services, intellectual services,
educational services, research services, financial management services, and technical services.
Obviously, this type of industry deals with people and demands higher level of expertise and
specialization.
More significantly, each industry demands from members of its workforce a specific level of
communication and competency.
 INDUSTRY
Industry, group of productive enterprises or organizations that produce or supply goods,
services, or sources of income. In economics, industries are generally classified as primary,
secondary, tertiary, and quaternary; secondary industries are further classified as heavy and
light.
Primary Industry
This sector of a nation’s economy includes agriculture, forestry, fishing, mining, quarrying, and
the extraction of minerals. It may be divided into two categories: genetic industry, including the
production of raw materials that may be increased by human intervention in the production
process; and extractive industry, including the production of exhaustible raw materials that
cannot be augmented through cultivation.
The genetic industries include agriculture, forestry, and livestock management and fishing—all
of which are subject to scientific and technological improvement of renewable resources. The
extractive industries include the mining of mineral ores, the quarrying of stone, and the
extraction of mineral fuels.
Primary industry tends to dominate the economies of undeveloped and developing nations, but
as secondary and tertiary industries are developed, its share of the economic output tends to
decrease.
Secondary Industry
This sector, also called manufacturing industry, (1) takes the raw materials supplied by primary
industries and processes them into consumer goods, or (2) further processes goods that other
secondary industries have transformed into products, or (3) builds capital goods used to
manufacture consumer and nonconsumer goods. Secondary industry also includes energy-
producing industries (e.g., hydroelectric industries) as well as the construction industry.
Secondary industry may be divided into heavy, or large-scale, and light, or small-scale,
industry. Large-scale industry generally requires heavy capital investment in plants
and machinery, serves a large and diverse market including other manufacturing industries, has
a complex industrial organization and frequently a skilled specialized labour force, and
generates a large volume of output. Examples would include petroleum refining, steel and iron
manufacturing (see metalwork), motor vehicle and heavy machinery
manufacture, cement production, nonferrous metal refining, meat-packing, and hydroelectric
power generation.
Light, or small-scale, industry may be characterized by the nondurability of manufactured
products and a smaller capital investment in plants and equipment, and it may involve
nonstandard products, such as customized or craft work. The labour force may be either low
skilled, as in textile work and clothing manufacture, food processing, and plastics manufacture,
or highly skilled, as in electronics and computer hardware manufacture, precision instrument
manufacture, gemstone cutting, and craft work.
Tertiary Industry
This broad sector, also called the service industry, includes industries that, while producing
no tangible goods, provide services or intangible gains or generate wealth. This sector generally
includes both private and government enterprises.
The industries of this sector include, among others, banking, finance, insurance, investment,
and real estate services; wholesale, retail, and resale trade; transportation; professional,
consulting, legal, and personal services; tourism, hotels, restaurants, and entertainment; repair
and maintenance services; and health, social welfare, administrative, police, security, and
defense services.
Quaternary Industry
An extension of tertiary industry that is often recognized as its own sector, quaternary industry,
is concerned with information-based or knowledge-oriented products and services. Like the
tertiary sector, it comprises a mixture of private and government endeavours. Industries and
activities in this sector include information systems and information technology (IT); research
and development, including technological development and scientific research; financial and
strategic analysis and consulting; media and communications technologies and services;
and education, including teaching and educational technologies and services.

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What Is an Industry?
An industry is a group of companies that are related based on their primary business activities.
In modern economies, there are dozens of industry classifications, which are typically grouped
into larger categories called sectors.
Individual companies are generally classified into an industry based on their largest sources of
revenue. For example, while an automobile manufacturer might have a financing division that
contributes 10% to the firm's overall revenues, the company would be classified in the
automaker industry by most classification systems.
How an Industry Works
Similar businesses are grouped into industries based on the primary product produced or sold,
creating industry groups that can be used to isolate businesses from those who participate in
different activities. Investors and economists often study industries to better understand the
factors and limitations of corporate profit growth. Companies operating in the same industry can
also be compared to each other to evaluate the relative attractiveness of a company within that
industry.
Stocks of companies operating within the same industry tend to have similar stock price
movements.
Special Considerations
Stocks within the same industry often rise and fall as a group, because the
same macroeconomic factors affect all members. These can include changes in market
sentiment on the part of investors, such as those based on a response to a particular event or
piece of news, as well as changes directed specifically towards the specific industry, such as
new regulations or increased raw material costs.
However, events relating to just one particular business can cause the associated stock to rise
or fall separately from others within the industry. This can be the result of events including, but
not limited to, a differentiating product release, a corporate scandal in the news or a change in
leadership structures.
KEY TAKEAWAYS
 Similar companies are grouped together into industries, and there are a number of
different industries, such as department stores and shoemakers.
 Industry grouping is based on the primary product that a company makes are sells.
Meanwhile, industries are grouped together into sectors.
 The North American Industry Classification System is the standard classification system
used by government agencies to organize companies into sectors or industries.
Industries vs. Sectors
While both sectors and industries are classification systems used to group like business
operations, sectors are broader than industries. For example, consumer goods is a sector in
the North American Industry Classification System (NAICS), and within that sector are
industries, such as rubber and plastic footwear and department stores. Nike Inc. and the Target
Corporation are members of the same consumer goods sector, but each would be listed in a
different industry based on the specifics of the products they produce or sell. Nike is classified
within the rubber and plastics footwear industry (NAICS Code 3021), while Target is classified
within the department stores industry (NAICS Code 45211).
The North American Industry Classification System (NAICS), developed by the United States,
Canada, and Mexico, is the standard upon which government agencies classify businesses
when compiling statistical data. In the NAICS hierarchy, companies that use similar production
processes are categorized in the same industry. Global Industry Classification Standard (GICS)
is also a commonly referenced classification system.

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What is Industry ? Meaning
The production side of business activity is referred as industry. It is a business activity, which is
related to the raising, producing, processing or manufacturing of products.
The products are consumer's goods as well as producer's goods. Consumer goods are goods,
which are used finally by consumers. E.g. Food grains, textiles, cosmetics, VCR, etc. Producer's
goods are the goods used by manufacturers for producing some other goods. E.g. Machinery,
tools, equipments, etc. Expansion of trade and commerce depends on industrial growth. It
represents the supply side of market.
Classification / Types of Industries ↓

There are various types of industries. These are mentioned as follows :-

1. Primary Industry
Primary industry is concerned with production of goods with the help of nature. It is a nature-
oriented industry, which requires very little human effort. E.g. Agriculture, farming, forestry,
fishing, horticulture, etc.
2. Genetic Industry
Genetic industries are engaged in re-production and multiplication of certain spices of plants
and animals with the object of sale. The main aim is to earn profit from such sale. E.g. plant
nurseries, cattle rearing, poultry, cattle breeding, etc.
3. Extractive Industry
Extractive industry is concerned with extraction or drawing out goods from the soil, air or water.
Generally products of extractive industries come in raw form and they are used by
manufacturing and construction industries for producing finished products. E.g. mining industry,
coal mineral, oil industry, iron ore, extraction of timber and rubber from forests, etc.
4. Manufacturing Industry
Manufacturing industries are engaged in transforming raw material into finished product with the
help of machines and manpower. The finished goods can be either consumer goods or
producer goods. E.g. textiles, chemicals, sugar industry, paper industry, etc
5. Construction Industry
Construction industries take up the work of construction of buildings, bridges, roads, dams,
canals, etc. This industry is different from all other types of industry because in case of other
industries goods can be produced at one place and sold at another place. But goods produced
and sold by constructive industry are erected at one place.
6. Service Industry
In modern times service sector plays an important role in the development of the nation and
therefore it is named as service industry. The main industries, which fall under this category,
include hotel industry, tourism industry, entertainment industry, etc.

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Classification Of Industry

One of the key concepts we aim to understand within Geography relates to the industry
environment. What we mean by this applies to the ability to distinguish between the different
industry functions. These different sectors play a significant role in our world environment and
understanding of the diverse economies. To allow for greater insight into your country’s role in
the different sectors, we need to zoom into the meaning of the different industries and classify
them accordingly.  
The four key industries we deal with relate to the Primary, Secondary, Tertiary and Quaternary
Industries. All these different sectors influence our economies, political statuses, relationships
with other countries across the world and our local stability. 
Now, generally, each country sits within different development levels. Some countries fall within
the developing classification and others in the developed bracket. These different meanings we
need to understand because it plays a key role to determine where they link with the diverse
industries. Let us see the classification of each industry and determine how they effect on
countries abilities to perform.
Primary Industry
To allow for the classification of a Primary Industry we focus on the following key points:
 The industry focuses on the use or extraction of original material from our earth’s
resources. 
  These industries include fishing, agriculture, afforestation, and mining.
 They process raw material for transfer to the more advanced sectors, for example, iron
ore.
 They less focus on the determination of value and rather aim to focus on the material
itself.
 Most developing countries rely on the success of the Primary Industry. 
 Developing and developed countries also use this sector to ensure the provision of
diverse employment opportunities to its citizens.
 This sector provides the bulk of work in developing countries. In the event of an
economic downturn, the primary sector struggles significantly. 
Secondary Industry
The Secondary Industry presents a more advanced level with a focus on the production of
goods. After the receipt of raw material from the primary sector, they use it to produce vehicles,
for example. Some key components that distinguish the secondary from the primary sectors
involve the following dynamics:
 The Secondary Industry seems more complex and takes value add seriously.
 The industry comprises different processing levels and stages that align with their
production levels.
 They focus on the identification of specific and preferred suppliers as well as markets.
Countries that rely on iron ore mining focus on trade agreements with steel production
markets for example.
 The secondary sector offers diverse product lines in different fields. For example, these
production capabilities include food processing, light or heavy industries. Also, it involves
the production of steel, vehicles, and the occurrence of diverse manufacturing plants. 
 Developed countries invested a significant effort to expand and grow the industrial
sections of their economy. They also advanced this section to a level where it becomes
more environmentally friendly.
 This industry provides significant work opportunities to a large component of a country’s
inhabitants and foreign labour market. 
 It remains an economically fragile sector, especially after the critique they received
because of extensive pollution levels in the industries.
Tertiary Industry
The Tertiary Industry offers a more advanced sector than the secondary and aims to focus on
the provision of services, mostly. Some key points to remember when understanding the
Tertiary Industry includes the following:
 This industry provides a service and does not focus on the production of goods.
  The Tertiary Industry focuses on the provision of intangible services and sometimes
difficult to measure.
 The sector aims to concentrate on supporting the Primary and Secondary Industries with
filling the gaps in the services sector. One needs to travel to work, and for this reason,
we find transport companies, for example. The taxi driver who takes you to the
manufacturing company you work for provides you with a service. You do not receive a
tangible object that makes the value difficult sometimes.
 This sector remains difficult to value because of the service-orientated dynamics they
carry. The pricing of an intangible service remains complex.
 Examples of the Tertiary Industry relates to the financial sector, media, pharmaceutical
services, legal advice, public health or communication.
 The tertiary sector normally declines in the event of an economic downturn. It remains a
fragile industry to work in. 
Quaternary Industry
The Quaternary Industry focuses especially on the provision of specialised services in the fields
of consultancy, research, science, and health for example. This section sometimes overlaps
with the tertiary sector but remains unique because of the advanced levels it requires. Some key
aspects to remember in the Quaternary Industry relates to the following: 
 The Quaternary Industry also focuses on the provision of services. It excludes the
production of any specific goods.
 It requires advanced levels of specialisation and highly skilled individuals.
 This sector sometimes receives the name as a white-collar environment because of the
high education levels required.
 The services connect with the tertiary sectors and provide a more advanced approach.
 Developed countries, for example, the UK offer significant opportunities to their
inhabitants in this sector. Sometimes it expands to over 70% of people working in this
environment.
 Examples of Quaternary Industry services include weather specialists, data analysts,
advanced information technology specialists, scientists in different fields, specialised
financial services or research and development sectors. 
 Developed countries focus more on their quaternary sectors than their Primary
Industries. 
 The Quaternary Industry provide intangible services that become difficult to measure.
The industry remains fragile because of the human factors embedded in the sector.
Humans feel sick during odd days and the performance levels drop. It, therefore,
becomes difficult to measure a specific value.
  Because of the specialised dynamics, this sector remains sensitive. During instability,
this sector seems to struggle the most because of its reliance on research funding, for
example. 

Frequently Asked Questions

Why do we need these different industries?
To ensure the proper planning and management of a country’s international and local affairs, we
need to divide the different sectors. It allows us to develop a greater understanding of each
industry’s requirements and the skills set they need. Besides, a country reaches the ability to
direct its resources and support to the different sectors. Imagine the chaos if we had no control
over our different sectors.
Which Industry remains the most important?
Although industries develop signs of progress to different levels, all of them remain key. We
cannot develop a tertiary sector without a primary one. Each industry plays a different but
important role to maintain our sustainability levels.
When do we talk about a Primary Industry?
We refer to a Primary Industry when we talk about the raw material or extraction industries.
They mostly focus on agricultural, afforestation, mining or fishing. This industry aims to collect
the earth’s resources for processing by the secondary sectors. 
When do we talk about a Secondary Industry?
We mostly refer to a Secondary Industry when we talk about our industrial areas, for example,
motor vehicle plants or steel manufacturing factories. They play a key role to produce goods.
These sectors also play a key function to support each country’s economy and form part of
diverse trade deals.
When do we talk about a Tertiary Industry?
We talk about Tertiary Industries when we refer to the services environment. For example, if you
visit your doctor, it forms part of the tertiary sector. 
When do we talk about a Quaternary Industry?
We talk about a Quaternary Industry when we focus on more advanced services, for example,
research and development or scientific services. This sector generally requires advanced
educated individuals and received the name of a white-collar industry. 

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PRIMARY INDUSTRY
The primary sector of the economy is the sector of an economy making direct use of natural
resources or exploit natural resources. This includes agriculture, forestry, fishing and mining
The manufacturing industries that aggregate, pack, package, purify or process the raw materials
close to the primary producers are normally considered part of this sector, especially if the raw
material is unsuitable for sale or difficult to transport long distances. Primary industry is a larger
sector in developing countries; for instance, animal husbandry is more common in Africa than in
Japan. Mining in 19th-century South Wales provides a case study of how an economy can
come to rely on one form of activity.
Canada is unusual among developed countries in the importance of its primary sector, with the
logging and petroleum industries being two of Canada's most important. However, in recent
years, the number of terminal exchanges have heavily reduced Canada's primary industry,
making Canadians rely more on quaternary industry.
In developed countries primary industry has become more technologically advanced, for
instance the mechanization of farming as opposed to hand picking and planting. In more
developed economies additional capital is invested in primary means of production. As an
example, in the United States corn belt, combine harvesters pick the corn, and spray systems
distribute large amounts of insecticides, herbicides and fungicides, producing a higher yield than
is possible using less capital-intensive techniques. These technological advances and
investment allow the primary sector to require less workforce and, this way, developed countries
tend to have a smaller percentage of their workforce involved in primary activities, instead
having a higher percentage involved in the secondary and tertiary sectors.
Developed countries are allowed to maintain and develop their primary industries even further
due to the excess wealth. For instance, European Union agricultural subsidies provide buffers
for the fluctuating inflation rates and prices of agricultural produce. This allows developed
countries to be able to export their agricultural products at extraordinarily low prices. This makes
them extremely competitive against those of poor or underdeveloped countries that maintain
free market policies and low or non-existent tariffs to counter them. Such differences also come
about due to more efficient production in developed economies, given farm machinery, better
information available to farmers, and often larger scale.
SECONDARY INDUSTRY
The secondary sector include industries that produce a finished, usable product or are involved
in construction.
This sector generally takes the output of the primary sector and manufactures finished goods or
where they are suitable for used by other businesses, for export, or sale to domestic
consumers. This sector is often divided into light industry and heavy industry. Many of these
industries consume large quantities of energy and require factories and machinery to convert
the raw materials into goods and products. They also produce waste materials and waste heat
that may cause environmental problems or cause pollution. The secondary sector supports both
the primary and tertiary sector.
Some economists contrast wealth-producing sectors in an economy such as manufacturing with
the service sector which tends to be wealth-consuming. Examples of service may include retail,
insurance, and government. These economists contend that an economy begins to decline as
its wealth-producing sector shrinks. Manufacturing is an important activity to promote economic
growth and development. Nations that export manufactured products tend to generate higher
marginal GDP growth which supports higher incomes and marginal tax revenue needed to fund
the quality of life initiatives such as health care and infrastructure in the economy. The field is an
important source for engineering job opportunities. Among developed countries, it is an
important source of well paying jobs for the middle class to facilitate greater social mobility for
successive generations on the economy.
TERTIARY INDUSTRY
The tertiary sector or service sector is the third of the three economic sectors of the three-sector
theory. The others are the secondary sector (approximately the same as manufacturing), and
the primary sector (raw materials).
The service sector consists of the production of services instead of end products. Services (also
known as "intangible goods") include attention, advice, access, experience, discussion, and
affective labor. The production of information has long been regarded as a service, but some
economists now attribute it to a fourth sector, the quaternary sector.
The tertiary sector of industry involves the provision of services to other businesses as well as
final consumers. Services may involve the transport, distribution and sale of goods from
producer to a consumer, as may happen in wholesaling and retailing, or may involve the
provision of a service, such as in pest control or entertainment. The goods may be transformed
in the process of providing the service, as happens in the restaurant industry. However, the
focus is on people interacting with people and serving the customer rather than transforming
physical goods.
It is sometimes hard to define whether a given company is part of the secondary or tertiary
sector. And it is not only companies that have been classified as part of that sector in some
schemes; government and its services such as police or military, and non-profit organizations
such as charities or research associations can also be seen as part of that sector. In order to
classify a business as a service, one can use classification systems such as the United Nations'
International Standard Industrial Classification standard, the United States' Standard Industrial
Classification (SIC) code system and its new replacement, the North American Industrial
Classification System (NAICS), the Statistical Classification of Economic Activities in the
European Community (NACE) in the EU and similar systems elsewhere. These governmental
classification systems have a first-level hierarchy that reflects whether the economic goods are
tangible or intangible.
For purposes of finance and market research, market-based classification systems such as the
Global Industry Classification Standard and the Industry Classification Benchmark are used to
classify businesses that participate in the service sector. Unlike governmental classification
systems, the first level of market-based classification systems divides the economy into
functionally related markets or industries. The second or third level of these hierarchies then
reflects whether goods or services are produced.
For the last 100 years, there has been a substantial shift from the primary and secondary
sectors to the tertiary sector in industrialised countries. This shift is called tertiarisation. The
tertiary sector is now the largest sector of the economy in the Western world, and is also the
fastest-growing sector. In examining the growth of the service sector in the early Nineties, the
globalist Kenichi Ohmae noted that:
"In the United States 70 percent of the workforce works in the service sector; in Japan, 60
percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many
of them are in the professional category. They are earning as much as manufacturing workers,
and often more.”
Economies tend to follow a developmental progression that takes them from a heavy reliance
on agriculture and mining, toward the development of manufacturing (e.g. automobiles, textiles,
shipbuilding, steel) and finally toward a more service-based structure. The first economy to
follow this path in the modern world was the United Kingdom. The speed at which other
economies have made the transition to service-based (or "post-industrial") economies has
increased over time....
QUATERNARY SECTOR
The quaternary sector of the economy is a way to describe a knowledge-based part of the
economy, which typically includes services such as information technology, information-
generation and -sharing, media, and research and development, as well as knowledge-based
services like consultation, education, financial planning, blogging, and designing.
The quaternary sector is based on knowledge and skill. It consists of intellectual industries
providing information services, such as computing and ICT (information and communication
technologies), consultancy (offering advice to businesses) and R&D (research, particularly in
scientific fields). According to some definitions, the quaternary sector includes other pure
services, such as the entertainment industry, and the term has been used to describe media,
culture, and government.
"Quaternary sector" is a further delineation of the three-sector hypothesis of industry in the
sense that the quaternary sector refers to a part of the third or tertiary sector along with the
quinary economic sector. It has been argued that intellectual services is distinct enough to
warrant a separate sector and not be considered merely as a part of the tertiary sector. This
sector evolves in well-developed countries and requires a highly educated workforce.
Between them, the tertiary and quaternary sectors form the largest part of the UK economy,
employing 76% of the workforce. The number of people who earn their living in these activities
is increasing. Companies invest in the quaternary sector to promote further expansion. It is seen
as a way to generate higher margins or returns on investment. Research will be directed into
cutting costs, tapping into markets, producing innovative ideas, new production methods and
methods of manufacture, amongst others. To many industries, such as the pharmaceutical
industry, the sector is the most valuable because it creates future secondary-sector branded
products from which companies may profit.
A fifth or quinary sector is sometimes identified as the human services sector, providing services
otherwise provided at home. This includes the hospitality industry.