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CLASSIFICATION:
PRIMARY:
It involves the earth's natural resources/extraction of materials like gold.Â
Examples include fishing, farming, and mining
SECONDARY:
It involves taking materials provided by primary and converting them into manufactured goods.
Examples include building, construction, and canning food
TERTIARY:
It involves providing services to consumers and/or other businesses
Examples include banking, retailing, hair dressing, and hotels
*Overall example: extracting wood (primary) ----> furniture makers make a sofa (secondary) ----> retailers sell sofa (tertiary)
PRIMARY ----> SECONDARY ----> TERTIARY = CHAIN OF PRODUCTION
----> Results: country X focuses more on extracting oil than making manufactured goods, so it is known as a developing country. On the other hand, country Y provides more services so it is known as a developed country.
NOTE:
Underdeveloped ----> Primary sector
INDUSTRIALIZATION OCCURS (a business goes from primary to secondary)
Developing ----> Secondary sector
DE-INDUSTRIALIZATION OCCUS (a business goes from secondary to tertiary)
Developed ----> Tertiary sector
CHANGES IN SECTOR IMPORTANCE:
De-industrialization: decline in the manufacturing/secondary sector of the industry and shift to the tertiary
WHY DO THESE CHANGES HAPPEN?
Sources of primary products have become depleted (example: cutting trees)
Developed countries lose competitiveness in manufacturing due to new industrial countries
As the countries wealth increases, consumers would rather spend their income on services rather than the primary sector
MIXED ECONOMY:
PRIVATE SECTOR:
Not owned by the government; they are owned by private individuals who decide what to do and how to make it
Their main aim is profit (most of the time)
PUBLIC SECTOR:
Owned by the government; it controls the business and makes decisions
Some goods/services are free of charge (example: health service)
Money comes from the taxpayer not the user
Hence, if you want to classify a business based on ACTIVITY, you have primary, secondary, and tertiary. However, if you want to classify a business based on OWNERSHIP, you have private and public sector
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