Classification of Businesses

Classification of
businesses
primary, secondary and tertiary sectors
Business Studies
Miss Castro
Understanding
business classification
In economics, sectors are
categorized into three main groups:
primary, secondary, and tertiary.
Each sector plays a crucial role in

the economy, contributing to the
production and distribution of goods
and services.
The primary sector is involved
in the extraction and
production of raw materials.
The primary sector is
concerned with the
extraction ofraw materials
from land, sea or air
This sector includes industries
such as agriculture, mining, and
forestry.
One example of a business in
the primary sector is Cargill, a
global agricultural corporation
Primary Sector that deals with the production
and distribution of agricultural
products, including crops,
livestock, and food ingredients.
The secondary sector involves the processing
and manufacturing of raw materials into
finished goods. This sector includes
industries such as manufacturing,
construction, and utilities.
An example of a business in the secondary

sector is Toyota, a leading automobile
manufacturer that produces vehicles and
automotive parts.
Secondary Sector
Tertiary Sector
The tertiary sector, also known as the service
sector, is involved in the provision of services to
consumers and businesses.
This sector includes industries such as retail,
healthcare, finance, and education. A notable
example of a business in the tertiary sector is
Amazon, a multinational e-commerce company
that provides a wide range of online retail
services.
The tertiary sector is concerned with the
provision of a wide range services for consumers
and other businesses
Examples include leisure, banking or hospitality
businesses
Interconnectedness
of Sectors
While each sector has its distinct role,
they are interconnected and rely on each
other for success. For example, the
primary sector provides raw materials to
the secondary sector for processing and
manufacturing, while the tertiary sector
relies on both the primary and secondary
sectors for goods and services.
Changes in Sector
As economies grow and develop, many of
the firms within that economy will
change their sector of operation
(sectoral change)
Generally speaking, there are higher levels of profit to be

made in the following sector.
The reason for this is that each sector adds more value
than the previous sector.
Higher added value means higher profits.
LESS-DEVELOPED ECONOMIES
Less-developed economies
A less developed economy will primarily be focused on the

primary sector – with most people employed in agriculture
and the production of food
There has been a global trend away from employment in

primary sector industries over the last two decades.
Only in the least developed nations is the proportion of the
workforce employed in the primary sector consistently high.
This is partly as a result of lower participation rates in
education and a lack of infrastructure to
support manufacturing or service provision
Emerging economies
EMERGING ECONOMIES
In emerging economies, technology means
that less labour is required in the primary
sector, and more workers are involved in manufacturing.
The proportion of workers employed in manufacturing

has risen overthe last few decades, especially in
countries such as Vietnam and Cambodia.
Many businesses have relocated production facilities to

take advantage of the lower average wage rates in
these economies
Developed Economy
DEVELOPED ECONOMIES
The most developed economies have a very high proportion
of the workforce employed in the provision of services.
Developed economies use their wealth to fund advanced

education and higher-level skills training, which further
supports the growth of these industries.
The most developed countries, such as the US and Germany,

have the highest proportion of their workforces employed in
the service industry.
Conclusion
It is easy to assume that tertiary sector employmentis higher-paid than
jobs in the secondary sector.
This is not necessarily the case. Value-added is certainly higher in most

tertiary industries than in secondary sector industries but in many tertiary
sectors (such as hospitality and healthcare) pay is very low and a cause for
concern.
Portugal and Greece, whose economies depend upon tourism, as well as

the UK suffer from low pay in the tertiary sector with many workers relying
on government support to cover basic living costs.
In contrast, high-paid secondary sector engineering and construction

sectors in economies such as Germany and Norway make employees in
these economies some ofthe highest-paid in the world.

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Classification of

Each sector plays a crucial role in

An example of a business in the secondary

Generally speaking, there are higher levels of profit to be

A less developed economy will primarily be focused on the

There has been a global trend away from employment in

The proportion of workers employed in manufacturing

Many businesses have relocated production facilities to

Developed economies use their wealth to fund advanced

The most developed countries, such as the US and Germany,

This is not necessarily the case. Value-added is certainly higher in most

Portugal and Greece, whose economies depend upon tourism, as well as

In contrast, high-paid secondary sector engineering and construction

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