Industry

Industry

Industry refers to economic activities, which are connected with conversion of resources into useful goods. Generally, the term industry is used for activities in which mechanical appliances and technical skills are involved. These include activities relating to producing or processing of goods, as well as, breeding and raising of animals. The term industry is also used to mean groups of firms producing similar or related goods.

Industries may be divided into three broad categories namely primary, secondary and tertiary.

(i) Primary industries: These include all those activities which are concerned with the extraction and production of natural resources and reproduction and development of living organisms, plants, etc. These are divided as follows.

(a) Extractive industries: These industries extract or draw products from natural sources. Extractive industries supply some basic raw materials that are mostly products of geographical or natural environment. Products of these industries are usually transformed into many other useful goods by manufacturing industries. Important extractive industries include farming, mining, lumbering, hunting and fishing operations.

(b) Genetic industries: These industries are engaged in breeding plants and animals for their use in further reproduction. Seeds and nursery companies are typical examples of genetic industries. In additional, activities of cattle breeding farms, poultry farms, and fish hatchery come under genetic industries.

(ii) Secondary industries: These are concerned with using materials, which have already been extracted at the primary state. These industries process such materials to produce goods for final

consumption or for further processing by other industrial units. For example, mining of iron ore is a primary industry, but manufacturing of steel by way of further processing of raw irons is a

secondary industry. Secondary industries may be further divided as follows:

(a)     Manufacturing industries: These industries are engaged in producing goods through processing of raw materials and, thus, creating form utilities. They bring out diverse finished products, that we consume, or use through the conversion of raw materials or partly finished materials in their manufacturing operations. Manufacturing industries may be further divided into four categories on the basis of method of operation for production.

• Analytical industry which analyses and separates different elements from the same materials, as in the case of oil refinery.

• Synthetical industry which combines various ingredients into a new product, as in the case of cement.

• Processing industry which involves successive stages for manufacturing finished products, as in the case of sugar and paper.

• Assembling industry which assembles different component parts to make a new product, as in the case of television, car, computer, etc.

(b) Construction industries: These industries are involved in the construction of buildings, dams, bridges, roads as well as tunnels  and canals. Engineering and architectural skills are an important part in construction industries.

(iii) Tertiary industries: These are concerned with providing support services to primary and secondary industries as well as activities relating to trade. These industries provide service facilities. As business activities, these may be considered part of commerce because as auxiliaries to trade these activities assist trade. Included in this category are transport, banking, insurance, warehousing, communication, packaging and advertising.

Source: NCERT Business studies text book