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
central, state or local
government bodies, and this
ownership is either full or
partial.
sector units is by
individuals or entities with
zero interference from
the government.
 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
like job security, housing
facilities, allowances and
retirement benefits.
benefits like higher salary
packages, better chances of
promotion and recognition,
competitive environment and
greater incentives in terms of
bonus and other benefits.
 Stability

Jobs within the public sector
are very stable since the
chances of getting sacked
due to non-performance are
very low.
Jobs within the private sector
are not very secure since non-
performance can lead to
sacking. Companies can also
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

help to improve the product quality
Thank you