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CLASSIFICATION
OF BUSINESSES ECONOMY
THE COUNTRY WHERE YOU LIVE HAS AN
ECONOMY. IT IS MEASURE OF ALL THE WEALTH AND RESOURCES IN YOUR COUNTRY. IT INCLUDES THE THINGS THAT YOUR COUNTRY PRODUCES AND THE GOODS AND SERVICES THAT CONSUMERS BUY. CLASSIFICATION OF PRIMARY SECTOR
BUSINESS SECONDARY SECTOR TERTIARY SECTOR PRIMARY SECTOR
ACTIVITY INVOLVES EXTRACTING OR HARVESTING NATURAL
RESOURCES FROM THE LAND OR SEA. PROVIDE RAW MATERIAL FOR SECONDARY SECTOR.FOR EX COTTON FOR TEXTILE INDUSTRY SOME PRIMARY SECTOR BUSINESS ACTIVITY PRODUCES FINAL PRODUCTS. FOR EXAMPLE, CONSUMER CAN BUY RAW VEGETABLE, FRUIT AND FISH. PRIMARY SECTOR SECONDARY SECTOR FIRMS THAT PROCESS AND MANUFACTURE GOODS FROM NATURAL RESOURCES. ACTIVITY IN SECONDARY SECTOR OF INDUSTRY INCLUDE BUILDING, CONSTRUCTION AIRCRAFT AND CAR MANUFACTURING COMPUTER ASSEMBLY, BREAD BAKING AND FURNITURE MAKING. EXAMPLE OF SECONDARY SECTOR- FOOD INDUSTRY - GLASS INDUSTRY -ELECTRICAL INDUSTRY - CHEMICAL INDUSTRY - REFINING SECONDARY SECTOR TERTIARY SECTOR
ACTIVITY INVOLVES SERVICES TO THE FINAL CONSUMERS OR
BUSINESS. PROVIDE SERVICES TO THE CONSUMERS- SALES PEOPLE, REPAIR SERVICES, BANKING AND INSURANCE. EXAMPLE- SHOPS, RESTURANT, BANKS, CINEMAS, AIRLINES. TERTIARY SECTOR HOW THE SECTOR DEPEND ON EACH OTHER CHAIN OF PRODUCTION ALL THE BUSINESSES THAT ARE INVOLVED IN MAKING GOODS OR PROVIDING SERVICES, FROM PRODUCING THE MATERIALS TO SELLING THE PRODUCT INVOLVING ACTIVITIES FROM PRIMARY, SECONDARY AND TERTIARY SECTOR BUSINESS. TYPES OF COUNTRIES DEVELOPING COUNTRIES some countries where Primary Industries DEVELOPED COUNTRIES such as farming and mining employe many Where manufacturing is started many more people than manufacturing a years ago. service industries. The secondary and tertiary sectors are Where manufacturing industry has only likely to employee many more workers recently been established. than the primary sector. Many people live in ruler areas with low Output of the tertiary sector is higher income and their race little demand for than the other two sector combined. services such as transport hotels and insurance. Employment in primary sector is higher than other two sectors CHANGES IN SECTOR IMPORTANCE
SOURCE OF SOME PRIMARY PRODUCTS BECOME DEPLETED.
MOST DEVELOPED ECONOMICS ARE LOSING COMPETITIVENESS IN MANUFACTURINGTO NEWLY INDUSTRIALISED COUNTRIES. COUNTRY'S TOTAL WEALTH INCREASES AND LIVING STANDARD OF CONSUMERS IS ALSO INCREASES BECAUSE OF THAT CONSUMER TRY TO SPEND HIGHER PROPORTION OF THEIR INCOME ON SERVICES SUCH A TRAVEL AND RESTAURANT THAN ON MANUFACTURED PRODUCTS PRODUCED FROM PRIMARY PRODUCTS INDUSTRIALISATION
THE GROWING IMPORTANCE OF SECONDARY SECTOR BUSINESS
ACTIVITY AND THE REDUCED IMPORTANCE OF PRIMARY SECTOR BUSINESS ACTIVITY .THE EMERGING ECONOMY OF BOTH CHINA AND INDIA ARE GOOD EXAMPLE •GROWTH OF INDUSTRIES LEADS TO INCREASE IN PRODUCTION OF GOODS AND SERVICES WHICH ARE AVAILABLE TO PEOPLE AT CHEAPER RATES.
•IT REDUCES DEPENDENCE ON OTHER COUNTRIES AND
IMPROVES ECONOMY.
•IT RESULTS IN RISING THE STANDARD OF LIVING.
•IT CREATES NEW JOB OPPORTUNITIES HELPING IN THE REMOVAL OF UNEMPLOYMENT. DE-INDUSTRIALISATION
THE GROWING IMPORTANCE OF THE TERTIARY SECTOR AND THE
REDUCED IMPORTANCE OF THE SECONDARY SECTOR. THE UK AND
USA ARE GOOD EXAMPLE OF THIS TYPE OF ECONOMIC ACTIVITY
TYPICALLY LEADS TO UNEMPLOYMENT AND ECONOMIC
DIFFICULTY. AS BUSINESSES AND FACTORIES CLOSE, PEOPLE
OFTEN RELOCATE AND AIR AND WATER QUALITY IMPROVE.
Mixed economy Most countries in the world have mixed economy. An economy where the resources are owned and controlled by both the private and public sector. The mixed economy is a system that combines capitalism and socialism. Sole trader Private sector Mixed partnership economy Public Nationalised sector industry Private sector In the private sector,
business are owned and
controlled by individuals or
group of individuals and
companies for profit. For
example, Sony, Tata
Corporation, Apple ,Reliance.
PUBLIC SECTOR In the public sector, organisation are owned by the country as a whole and controlled by the state or government. For example, most countries have publicly owned television and radio broadcasting services such as Doordarshan in India and SABC in South Africa. Ownership
The ownership of the public The ownership of private
sector units can be by sector units is by central, state or local individuals or entities with government bodies, and this zero interference from ownership is either full or the government. partial. Motive
The main motive of public The main motive of the
sector organisations is to private sector is to earn engage in activities that profits from their business serve the general public. operations. Source of Capital
The capital for public The capital for private
sector undertakings comes sector entities comes either from tax collections, excise from its owners or through and other duties, bonds, loans, issuing shares and treasury bills etc. debentures, etc. Employment Benefits
Public sector units provide Private sector units offer
several employment benefits benefits like higher salary like job security, housing packages, better chances of facilities, allowances and promotion and recognition, retirement benefits. competitive environment and greater incentives in terms of bonus and other benefits. Stability
Jobs within the public sector Jobs within the private sector are very stable since the are not very secure since non- chances of getting sacked performance can lead to due to non-performance are sacking. Companies can also very low. fire people in case of cost cutting or scaling down of operations. Promotions
The criteria for promotion The criteria for promotion
in the public sector units is in the private sector units is generally based on the generally based on the seniority of the employee. merit and job performance of the employee. Recent changes in Economy Bharat Aluminium Company – sold to Vedanta Limited in 2000 Air India – sold to Tata Group in 2020 Indian Petrochemicals Corporatio n Limited – sold to Reliance Industries Private sector business are more efficient than public sector business.
Private sector owner might invest more capital in the
business, than the government can afford.
The purpose of the sale is mainly to improve financial
discipline and facilitate modernization.
Competition between the private sector business can
