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.
In macroeconomics, an industry is a branch of an economy that produces a closely
related set of raw materials, goods, or services.[1] For example, one might refer to
the wood industry or the insurance industry.
For a single group or company, its dominant source of revenue is typically used to
classify it within a specific industry.[2] However, a single business need not belong to
one industry, such as when a large business is diversified across separate industries
(often referred to as a conglomerate).
Because industries are tied to specific products, processes, and consumer markets,
they can evolve over time. One distinct industry (for example, barrel making) may
become limited to a tiny niche market and mostly absorbed into another industry using
new techniques. At the same time, entirely new industries may branch off from older
ones once a significant market becomes apparent (as the semiconductor
industry developed from the wider electronics industry).
Industry classification is valuable for economic analysis because it leads to largely
distinct categories with simple relationships. However, more complex cases, such as
otherwise different processes yielding similar products, require an element
of standardization and prevent any one schema from fitting all possible uses.
Economic theories group industries further into economic sectors.
Manufacturing is the production of goods through the use of labor, machines, tools,
and chemical or biological processing or formulation. It is the essence of secondary
sector of the economy.[1] The term may refer to a range of human activity,
from handicraft to high-tech, but it is most commonly applied to industrial design, in
which raw materials from the primary sector are transformed into finished goods on a
large scale. Such goods may be sold to other manufacturers for the production of other
more complex products (such as aircraft, household appliances, furniture, sports
equipment or automobiles), or distributed via the tertiary industry to end
users and consumers (usually through wholesalers, who in turn sell to retailers, who
then sell them to individual customers).
Manufacturing engineering, or the manufacturing process, are the steps through
which raw materials are transformed into a final product. The manufacturing process
begins with the product design, and materials specification from which the product is
made. These materials are then modified through manufacturing processes to become
the required part.
Modern manufacturing includes all intermediate processes required in the production
and integration of a product's components. Some industries, such
as semiconductor and steel manufacturers, use the term fabrication instead.
The manufacturing sector is closely connected with the engineering and industrial
design. Examples of major manufacturers in North America include General Motors
Corporation, General Electric, Procter & Gamble, General
Dynamics, Boeing, Pfizer, Precision Castparts, and Fiat Chrysler Automobiles.
Examples in Europe include Volkswagen Group, Siemens, BASF and Michelin.
Examples in Asia include Toyota, Yamaha, Panasonic, LG, Samsung and Tata Motors.

History and development

Finished regenerative thermal oxidizer at manufacturing plant

Assembly of Section 41 of a Boeing 787 Dreamliner

An industrial worker amidst heavy steel semi-products (KINEX

BEARINGS, Bytča, Slovakia, c. 1995–2000)
A modern automobile assembly line
Manufacturing began in the 19th century.[2] It was usually carried out by single
skilled artisans with assistants. Training was by apprenticeship. In much of the pre-
industrial world, the guild system protected the privileges and trade secrets of urban
artisans.
In the pre-industrial world, most manufacturing occurred in rural areas, where
household-based manufacturing served as a supplemental subsistence strategy
to agriculture (and continues to do so in places). Entrepreneurs organized a number of
manufacturing households into a single enterprise through the putting-out system.
The factory system was first adopted in Britain at the beginning of the Industrial
Revolution in the late 18th century and later spread around the world. [3] The main
characteristic of the factory system is the use of machinery, originally powered by water
or steam and later by electricity. Increased use of economies of scale, the centralization
of factories, and standardization of interchangeable parts were adopted in the American
system of manufacturing in the nineteenth century.
The mechanized assembly line was introduced to assemble parts in a repeatable
fashion, with individual workers performing specific steps during the process. This led to
significant increases in efficiency, lowering the cost of the end process.
Later, automation was introduced to incrementally replace human operators, a trend
that has accelerated with the development of the computer and the robot.

Many people think of industry as the collective large-scale manufacturing of goods in

well-organized plants with a high degree of automation and specialization. Although this
is a common example of industry, it can also include other commercial activities that
provide goods and services such as agriculture, transportation, hospitality, and many
others. Industry can be classified into different categories or levels for a better
understanding of the different types and for making it easier to study. Although many
school textbooks list only three levels, more advanced books classify industry into five
levels.
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.
 The terms for each level originate from Latin words referring to the numbers one to
four.
Levels of Industry
Primary (first): Primary industries are those that extract or produce raw materials from
which useful items can be made. Extraction of raw materials includes mining activities,
forestry, and fishing. Agriculture is also considered a primary industry as it produces
“raw materials” that require further processing for human use.
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.

Major businesses in this sector include agriculture, fishing, forestry and all mining and
quarrying industriesThe primary sector of industry is also called extraction. It generally
involves changing natural resources into primary products. Most products from this
sector are considered raw materials for other industries.Primary industry is a larger
sector in developing countries; for instance, animal husbandry is more common in Africa
than in Japan.
Secondary (second): Secondary industries are those that change raw materials into
usable products through processing and manufacturing. Bakeries that make flour into
bread and factories that change metals and plastics into vehicles are examples of
secondary industries. The term “value added” is sometimes applied to processed and
manufactured items since the change from a raw material into a usable product has
added value to the item.
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.
The secondary sector (manufacturing) produces finished, usable products. This sector
of industry generally takes the output of the primary sector and manufactures finished
goods or where they are suitable for use by other businesses, for export, or sale to
domestic consumers.* Aerospace manufacturing* Automobile manufacturing* Brewing
industry* Chemical industry* Clothing industry* Electronics* Engineering* Energy
industries* Metalworking* Steel production* Software engineering*
TelecommunicationsIndustry* Tobacco industryThis sector is often divided into light
industry and heavy industry.
Tertiary (third): Tertiary industries are those that provide essential services and
support to allow other levels of industry to function. Often simply called service
industries, this level includes transportation, finance, utilities, education, retail, housing,
medical, and other services. Since primary and secondary levels of industry cannot
function without these services, they are sometimes referred to as “spin-off” industries.
Much of the city of Thompson, for example, is made up of tertiary or service industries
to support the primary industry of mining.
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.
The tertiary sector of industry is also known as the service sector or the service
industry.
It involves the provision of services to businesses as well as final consumers. Services
may involve the transport, distribution and sale of goods from producer to a consumer,
or may involve the provision of a service, such as in pest control or entertainment.News
mediaLeisure industry/hotelsConsultingHealthcare/hospitalsWaste disposalEstate
agentsBusiness servicesRestaurantsLocal government servicesCentral government
servicesEducationLaw and orderGoods may be transformed in the process of providing
a service, as happens in the restaurant industry or in equipment repair. However, the
focus is on interacting with people and serving the customer rather than transforming
physical goods.

Quaternary (fourth): Quaternary industries are those for the creation and transfer of
information, including research and training. Often called information industries, this
level has seen dramatic growth as a result of advancements in technology and
electronic display and transmission of information.
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.
The quaternary sector is the research industry.
Industrial research looks for new ways to cut costs, find new markets, produce new
ideas, new production methods and methods of manufacture.

Goods
All of the companies are linked in one way or another. For example:

 The raw material cotton is extracted by primary industries

 The cotton may then be turned into an item of clothing in the secondary industry.
 Tertiary industries may advertise the goods in magazines and newspapers.
 The quaternary industry may involve the product being advertised or researched
to check that the item of clothing meets the standards that it claims too.
An industry is a group of organizations involved in producing/manufacturing or handling
the same type of product and service. So, a group of smartphone manufacturers is known
as an industry.

Industry:

Industries are part of the secondary activity. Secondary activities or manufacturing

converts raw material into products of more value to people. Industry refers to economic
activities concerned with the production of goods, extraction of services and provision or
services.

Importance of Industries in Development – Industrial sector is of great Importance

of Industries in Development of a country. It is a proven fact that a country with
strong industrial sector have shown more economic growth, had improved national
income and promoted living standard of people. Industrialization has played an
important role in improving the economic conditions of various countries like America
and Japan, by removing unemployment. Advantages of Industrialization are as
follows:

Importance of Industries in Development

1. Economic Stability:

A country that only depends upon agriculture sector cannot achieve stability. There is
an imbalance, only the man-power i.e. labour-intensive technology is being used.
Hence, industrialization provides economic stability to the country where in the country
is not solely dependent on only one sector. There is a balance between the contribution
of both the sectors to the economy.You are reading article on Importance of
Industries in Development of country .

2. Increase in foreign exchange reserve:

With the introduction of more and more industries, there will be a rise in foreign
exchange earnings. The exports will rise and imports will start falling in numbers. There
would be more cash inflow, self-sufficiency will increase.

3. Utilization of Natural Resources:

There may be a lot of resources lying unused like barren lands and minerals, which can
be of no use to the agricultural or financial sectors of a country. Therefore industrial
development would add to the utilization of such resources, which otherwise would have
been completely wasted and their contribution in monetary terms would have been NIL.

4. Supports Agricultural, Defence and other sectors of economy:

With the development of industrial sector other sectors are also benefited. Industries
provide machinery like tractors and modern inputs to the agricultural sector. It improves
the working and live-style of the farmers. Industries also provides arms and ammunition
for the defence of a country, without these the country will become extremely
vulnerable. You are reading article on Importance of Industries in Development of
country . And also the country cannot rely upon other countries for it’s
provision.Industrialization also improves other sectors like transport, construction,
communication, finance etc , as it provides infrastructure and other supportive elements
for all these sectors.

5. Improvement of Balance of Payment and government revenue:

Due to industrialization, domestic goods i.e. goods manufactured by own country

increases, and so does it’s exports. It is favorable for balance of payment because
value of finished goods increases as compared to the primary goods. Collection of taxes
like excise duty , indirect taxes, income taxes also increases with industrialisation.

6. Improvement in Investment and Spending:

Industrialization causes the income of people to rise, and improves their standard of
living. There is a rise in income, and so rate of savings, rate of investment and rate of
spending also rises automatically. This is an important event for the rapid growth of a
country.

And last but not the least, it provides huge employment to the people of a country.
Thereby eliminates most of the social and economic problems of a country ,
as unemployment is the route cause that has underpinned all the drawbacks for a
country.The most Importance of Industries is to reduce unemployment.

Industries are broadly classification into three types (i.e. On the basis of Raw Materials,
On the basis of Size and On the basis of Ownership).

1. On the basis of Raw Materials: These types of industries are classified depending
on the type of raw materials they use.

(a) Agro Based Industries: Use plant and animal based products as their raw
materials. E.g. Food processing, vegetable oil, cotton textile, dairy products, etc.

(b) Mineral Based Industries: Primary industries that use mineral ores as their raw
materials. The products of these industries feed other industries. Iron made from iron
ore is the product of mineral based industry. E.g. Iron & Steel, Cement, Machine, Tools,
etc.

(c) Pastoral Based Industries: Use raw material's from animals like, Sheep, goat, etc.
These industries use skin, bones, flesh, etc. E.g. Dairy product industries, Leather
industries, etc.

(d) Marine Based Industries: Use products from the sea and oceans as raw materials.
E.g. processed sea food, fish oil manufacturers, etc.

(e) Forest Based Industries: Use forest produce as raw materials. E.g. pulp & paper,
furniture. Pharmaceuticals, etc.

2. On the basis of Size: These types of industries are classified depending on the
amount of capital invested, number of people employed and the volume of production.

(a) Large Scale Industries: In India, on an industry, if the capital invested is more than
1 crore, then it is called Large Scale Industry. E.g. Iron & Steel Industries, Automobile
Industries, etc.

(b) Small Scale Industries: In India, on an industry, if the capital invested is less than 1
crore, then it is called Small Scale Industry. E.g. Silk weaving, Food processing
industries, etc.

(c) Cottage or Household Industries: These are a type of small scale industry where

the products are manufactured by hand, by the artisans with the help of family
members. E.g. Basket weaving, pottery, handicrafts, etc.

3. On the basis of Ownership: These types of industries are classified on the basis of
ownership.

(a) Private Sector Industries: Owned and operated by individuals or a group of

individuals. E.g. Bajaj Auto, Reliance, etc.

(b) Public Sector Industries: Owned and operated by the government. E.g. Hindustan

Aeronautics Limited (HAL), Bharat Heavy Electronics Ltd. (BHEL), SAIL, etc.
(c) Joint Sector Industries: Owned and operated by the state and individuals or a
group of individuals. E.g. Indian Oil, Maruti Udyog Ltd., etc.

(d) Co-operative Sector Industries: Owned and operated by the producers or

suppliers of raw materials, workers or both. E.g. IFFCO, Anand Milk Union Limited
(AMUL) and Sudha Dairy, etc.
(e) Multinational Corporations: Setup in collaboration with foreign investors. Owned
and managed by members of two or more countries. E.g. Coca Cola, Maruti Udyog Ltd.,
etc.

Factors Influencing the Location of Industries : Geographical and Non-Geographical

Factors
Many important geographical factors involved in the location of individual industries are
of relative significance, e.g., availability of raw materials, power resources, water,
labour, markets and the transport facilities.

But besides such purely geographical factors influencing industrial location, there are

factors of historical, human, political and economic nature which are now tending to

surpass the force of geographical advantages. Consequently, the factors influencing the

location of industry can be divided into two broad categories i.e.

(I) Geographical factors, and

(II) Non-geographical factors.

I. Geographical Factors:

Following are the important geographical factors influencing the location of industries.

1. Raw Materials:

The significance of raw materials in manufacturing industry is so fundamental that it

needs no emphasising. Indeed, the location of industrial enterprises is sometimes

determined simply by location of the raw materials. Modem industry is so complex that a

wide range of raw materials is necessary for its growth.

Further we should bear in mind that finished product of one industry may well be the

raw material of another. For example, pig iron, produced by smelting industry, serves as

the raw material for steel making industry. Industries which use heavy and bulky raw

materials in their primary stage in large quantities are usually located near the supply of

the raw materials.

It is true in the case of raw materials which lose weight in the process of manufacture or

which cannot bear high transport cost or cannot be transported over long distances

because of their perishable nature. This has been recognised since 1909 when Alfred

Weber published his theory of location of industry.

The jute mills in West Bengal, sugar mills in Uttar Pradesh, cotton textile mills in

Maharashtra and Gujarat are concentrated close to the sources of raw materials for this

very reason. Industries like iron and steel, which use very large quantities of coal and

iron ore, losing lot of weight in the process of manufacture, are generally located near

the sources of coal and iron ore.

Some of the industries, like watch and electronics industries use very wide range of light

raw materials and the attractive influence of each separate material diminishes. The

result is that such industries are often located with no reference to raw materials and

are sometimes referred to as ‘footloose industries’ because a wide range of locations is

possible within an area of sufficient population density.

2. Power:

Regular supply of power is a pre-requisite for the localisation of industries. Coal, mineral

oil and hydro-electricity are the three important conventional sources of power. Most of

the industries tend to concentrate at the source of power.

The iron and steel industry which mainly depends on large quantities of coking coal as

source of power are frequently tied to coal fields. Others like the electro-metallurgical

and electro-chemical industries, which are great users of cheap hydro-electric power,

are generally found in the areas of hydro-power production, for instance, aluminium

industry.

As petroleum can be easily piped and electricity can be transmitted over long distances

by wires, it is possible to disperse the industry over a larger area. Industries moved to

southern states only when hydro-power could be developed in these coal-deficient

areas.

Thus, more than all other factors affecting the location of large and heavy industries,

quite often they are established at a point which has the best economic advantage in

obtaining power and raw materials.

Tata Iron and Steel Plant at Jamshedpur, the new aluminium producing units at Korba

(Chhattisgarh) and Renukoot (Uttar Pradesh), the copper smelting plant at Khetri

(Rajasthan) and the fertilizer factory at Nangal (Punjab) are near the sources of power

and raw material deposits, although other factors have also played their role.

3. Labour:

No one can deny that the prior existence of a labour force is attractive to industry unless

there are strong reasons to the contrary. Labour supply is important in two respects (a)

workers in large numbers are often required; (b) people with skill or technical expertise

are needed. Estall and Buchanan showed in 1961 that labour costs can vary between

62 per cent in clothing and related industries to 29 per cent in the chemical industry; in

the fabricated metal products industries they work out at 43 per cent.
In our country, modem industry still requires a large number of workers in spite of

increasing mechanisation. There is no problem in securing unskilled labour by locating

such industries in large urban centres. Although, the location of any industrial unit is

determined after a careful balancing of all relevant factors, yet the light consumer goods

and agro-based industries generally require a plentiful of labour supply.

4. Transport:

Transport by land or water is necessary for the assembly of raw materials and for the

marketing of the finished products. The development of railways in India, connecting the

port towns with hinterland determined the location of many industries around Kolkata,

Mumbai and Chennai. As industrial development also furthers the improvement of

transport facilities, it is difficult to estimate how much a particular industry owes to

original transport facilities available in a particular area.

5. Market:

The entire process of manufacturing is useless until the finished goods reach the

market. Nearness to market is essential for quick disposal of manufactured goods. It

helps in reducing the transport cost and enables the consumer to get things at cheaper

rates.

It is becoming more and more true that industries are seeking locations as near as

possible to their markets; it has been remarked that market attractions are now so great

that a market location is being increasingly regarded as the normal one, and that a

location elsewhere needs very strong justification.

Ready market is most essential for perishable and heavy commodities. Sometimes,

there is a considerable material increase in weight, bulk or fragility during the process of

manufacture and in such cases industry tends to be market oriented.

6. Water:

Water is another important requirement for industries. Many industries are established

near rivers, canals and lakes, because of this reason. Iron and steel industry, textile

industries and chemical industries require large quantities of water, for their proper

functioning.

Also it requires 36,400 litres of water to produce one kwh of thermal electricity. Further,

it is worth noting that water used in industries gets polluted and is therefore not

available for any other purpose.

7. Site:

Site requirements for industrial development are of considerable significance. Sites,

generally, should be flat and well served by adequate transport facilities. Large areas

are required to build factories. Now, there is a tendency to set up industries in rural

areas because the cost of land has shot up in urban centres.

8. Climate:

Climate plays an important role in the establishment of industries at a place. Harsh

climate is not much suitable for the establishment of industries. There can be no

industrial development in extremely hot, humid, dry or cold climate.

The extreme type of climate of north-west India hinders the development of industries.

In contrast to this, the moderate climate of west coastal area is quite congenial to the

development of industries. Because of this reason, about 24 per cent of India’s modem

industries and 30 per cent of India’s industrial labour is concentrated in Maharashtra-

Gujarat region alone.

Cotton textile industry requires humid climate because thread breaks in dry climate.

Consequently, majority of cotton textile mills are concentrated in Maharashtra and

Gujarat. Artificial humidifiers are used in dry areas these days, but it increases the cost

of production.

II. Non-Geographical Factors:

Now-a-days alternative raw materials are also being used because of modern scientific

and technological developments. Availability of electric power supply over wider areas

and the increasing mobility of labour have reduced the influence of geographical factors

on the location of industries.

The non-geographical factors are those including economic, political, historical and

social factors. These factors influence our modern industries to a great extent. Following

are some of the important non- geographical factors influencing the location of

industries.

1. Capital:

Modem industries are capital-intensive and require huge investments. Capitalists are

available in urban centres. Big cities like Mumbai, Kolkata, Delhi, and Chennai are big

industrial centres, because the big capitalists live in these cities.

2. Government Policies:

Government activity in planning the future distribution of industries, for reducing regional

disparities, elimination of pollution of air and water and for avoiding their heavy

clustering in big cities, has become no less an important locational factor.

There is an increasing trend to set up all types of industries in an area, where they

derive common advantage of water and power and supply to each other the products

they turn out. The latest example in our country is the establishment of a large number

of industrial estates all over India even in the small-scale industrial sector.
It is of relevance to examine the influence of India’s Five Year plans on industrial

location in the country. The emergence of suitable industries in south India around new

nuclei of public sector plants and their dispersal to backward potential areas has taken

place due to Government policies.

The state policy of industrial location has a greater hand in the establishment of a

number of fertiliser factories, iron and steel plants, engineering works and machine tool

factories including railway, shipping, aircraft and defence installations and oil refineries

in various parts in the new planning era in free India.

We may conclude by noting that the traditional explanation of a location of industry at a

geographically favourable point is no longer true. Location of oil refinery at Mathura,

coach factory at Kapurthala and fertiliser plant at Jagdishpur are some of the results of

government policies.

3. Industrial Inertia:

Industries tend to develop at the place of their original establishment, though the original

cause may have disappeared. This phenomenon is referred to as inertia, sometimes as

geographical inertia and sometimes industrial inertia. The lock industry at Aligarh is

such an example.

4. Efficient Organisation:

Efficient and enterprising organisation and management is essential for running modem

industry successfully. Bad management sometimes squanders away the capital and

puts the industry in financial trouble leading to industrial ruin.

Bad management does not handle the labour force efficiently and tactfully, resulting in

labour unrest. It is detrimental to the interest of the industry. Strikes and lock-outs lead
to the closure of industries. Hence, there is an imperative need of effective management

and organisation to run the industries.

5. Banking Facilities:

Establishment of industries involves daily exchange of crores of rupees which is

possible through banking facilities only. So the areas with better banking facilities are

better suited to the establishment of industries.

6. Insurance:

There is a constant fear of damage to machine and man in industries for which

insurance facilities are badly needed.

CONCLUSION :
Industries are very helpful to us in all types of items whether it is food,furniture,steel and
other types of things. Without industry life would become very difficult and more hard
working as the items needed to be produced will be in large quantity which cannot be
done through hand work in one day while machines present in industry could make that
quantity of items ten times faster than hand work. Therefore it is very much necessary
to built industry in our country.