A nation's economy can be divided into various sectors to define the proportion of the population engaged in the activity sector. This categorization is seen as a continuum of distance from the natural environment. The continuum starts with the primary sector, which concerns itself with the utilization of raw materials from the earth such as agriculture and mining. From there, the distance from the raw materials of the earth increases.
Primary Sector
The primary sector of the economy extracts or harvests products from the earth. The primary sector includes the production of raw material and basic foods. Activities associated with the primary sector include agriculture (both subsistence and commercial), mining, forestry, farming, grazing, hunting and gathering, fishing, and quarrying. The packaging and processing of the raw material associated with this sector is also considered to be part of this sector.
In developed and developing countries, a decreasing proportion of workers are involved in the primary sector. For example, about 3% of the U.S. labour force is engaged in primary sector activity today, while more than two-thirds of the labour force were primary sector workers in the mid-nineteenth century.
Secondary Sector
The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector. 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 pose environmental problems or cause pollution.
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
Divisions of this sector include: aerospace manufacturing, automobile industry, brewing industry, chemical industry, textile industry, consumer electronics, energy industry, steel production, tobacco industry
Tertiary Sector
The tertiary sector of the economy is the service industry. This sector provides services to the general population and to businesses. Activities associated with this sector include retail and wholesale sales, transportation and distribution, entertainment (movies, television, radio, music, theatre, etc.), restaurants, clerical services, media, tourism, insurance, banking, healthcare, and law.
In most developed and developing countries, a growing proportion of workers are devoted to the tertiary sector. For example, in the U.S., more than 80% of the labour force are tertiary workers.
Increasingly service sector businesses are focusing on the idea of the "knowledge economy," by understanding what their customers want and how to deliver it quickly and efficiently.
One good example of this is the banking industry which has gone through enormous changes in recent years. Using information and communication technology, banks have vastly reduced the number of staff they need. Many banks and building societies have merged to form much "leaner" businesses capable of extracting more profit from a wider customer base. Key to this process has been gaining information about customers and constantly providing them with new products.
Quaternary Sector
The quaternary sector of the economy consists of intellectual activities. Activities associated with this sector include government, culture, libraries, scientific research, education, and information technology.
The quaternary sector can be also seen as the sector in which companies invest in order to ensure further expansion. 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 branded products which the company will profit from.
Quinary Sector
Some consider there to be a branch of the quaternary sector called the quinary sector, which includes the highest levels of decision making in a society or economy. This sector would include the top executives or officials in such fields as government, science, universities, non-profit, healthcare, culture, and the media.
For example, the quinary sector in Australia refers to domestic activities such as those performed by stay-at-home parents or homemakers. These activities are typically not measured by monetary amounts but it is important to recognize these activities in contribution to the economy.
Exercise 1: decide which sectors of economy these activities belong to
| 1. | nuclear energy production |
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| 2. | energy-saving consulting |
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| 3. | harvesting crops |
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| 4. | legal advisory |
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| 5. | obtaining salt from sea water |
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| 6. | research in cold fusion |
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| 7. | suggestions of academic specialists in central banking |
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| 8. | production of vehicle engines |
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| 9. | uranium mining |
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| 10. | making horror movies |
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| 11. | cardiologists' proposals in artificial heart development |
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| 12. | extraction of spring water |
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| 13. | crude oil processing |
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| 14. | dental care |
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| 15. | postgraduate education |
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KEY: primary - 3, 9, 5, 12 secondary - 8, 13, 1 tertiary - 14, 10, 4 quaternary - 15, 6, 2 quinary - 7, 11
Exercise 2: match the expressions 1 - 8 with their definitions A - H
1.to tap, 2. mobility, 3.to brew, 4.machinery, 5.raw material, 6.retail, 7.to harvest, 8.pharmaceutical
A. to cut and gather a crop
B. to make use of a source of energy, knowledge, money, etc. that already exists
C. machines as a group, especially large ones
D. a natural or basic substance that is used to make something in an industrial process
E. the selling of goods to the public, especially through shops/stores
F. to make beer
G. the ability to move easily from one place, social class or job to another
H. connected with making and selling drugs and medicines
KEY: 1 - B, 2 - G, 3 - F, 4 - C, 5 - D, 6 - E, 7 - A, 8 - H
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