Characteristics of industry

Industry is classified into different sectors – secondary, tertiary and quaternary. The employment structure of a country shows how the labour force is divided into the different sectors.

Classification of industry

Secondary industry

Factory

Factory

 

Secondary industries are those that take theraw materials produced by the primary sector and process them into manufactured goods and products.

Examples of secondary industries includeheavy manufacturing, light manufacturing, food processing, oil refining and energy production.

Tertiary and quaternary industry

The tertiary sector is also called the service sector and involves the selling of services and skills. They can also involve selling goods and products from primary and secondary industries. Examples of tertiary employment include the health service, transportation, education, entertainment, tourism, finance, sales andretail.

Royal Victoria Hospital, Belfast

Royal Victoria Hospital, Belfast

 

The biggest area of expansion in the tertiary sector in the UK has been in financial and business services. According to government statistics, 25 years ago one in ten people worked in this industry, now it is 1 in 5.

The quaternary sector consists of those industries providing information services, such as computing, ICT (information and communication technologies), consultancy (offering advice to businesses) and R&D (research, particularly in scientific fields).

The quaternary sector is sometimes included with the tertiary sector, as they are both service sectors. The tertiary and quaternary sectors make up the largest part of the UK economy, employing 76 per cent of the workforce.

Comparing employment structures

The employment structure of a country shows how the labour force is divided between the primary, secondary and tertiary sectors. Different countries have different employment structures. The employment structure of a given country can tell you quite a lot about its economy.

In the richest countries, for example, there will usually be more people working in the tertiary/quaternary sector than in the primary and secondary sectors. In the poorest countries, there tend to be more people working in the primary sector than in either the secondary or tertiary sectors.

Look at the diagram below. Based on the employment structure, which countries do you think are the richest and poorest?

 

In the richest country (USA), most people work in the tertiary sector. In the poorest country (Nepal), most people work in the primary sector. In Brazil, the labour force is more evenly distributed between the three sectors.

Note that the quaternary sector has been included in the tertiary sector.

Changing employment structures over time

Employment structures can also change over time within the same country.

In the UK in 1,800 most people would have been employed in the primary sector. Many people worked on the land, and made their living from agriculture and related products.

During the industrial revolution, more people were needed to build ships, work in steel making and with textiles. All of these jobs are found in the secondary sector. By 1900 over half of the workers in the UK were employed in secondary industries.

Since 1900 mechanisation meant that less people were required to work on the land and in industry, as machines could carry out most of the work that people previously did.

Foreign industries also became more competitive and imports such as coal became more affordable. As the availability of coal declined in the UK, and also became more expensive to extract more coal was imported. This led to a further decline in primary sector employment in the UK.

The demand for work increased in schools, hospitals and retail industries. Many people left the rural areas in the search for jobs in the towns and cities. By the year 2000 over half of the UK workforce were employed in tertiary industries and only a small number were employed in primary industries. This has changed the work that people do, and also where they work. Quaternary industries are a relatively new concept, and it is only recently that they have been added to these figures. However it is becoming an important and growing sector in the UK as many firms want to carry out research and development for their products.

Line graph to show the UK employment structure from 1800 – 2000

Line graph to show the UK employment structure from 1800 – 2000

Industrial location factors

Different industries require different inputs. Industries are more likely to locate where these inputs are readily and cheaply available. Factors that influence where an industry locates include:

  • power supply
  • communications – including transport, telecommunications
  • labour supply – including workers with the right skills
  • access to market – where the goods are sold
  • grants and financial incentives – usually from governments
  • raw materials

Use the activity below to check your understanding of how these factors affect industrial location decisions. Work out where on the map would be the best site for each company and then click on that location.

 

Agglomeration and footloose industries

These are two ‘special cases’ of industrial location.

Agglomeration is when a number of producers in the same or related industries group themselves together. They do this to benefit from local skill pools, economies of scale or the prowess of a locality in a particular field. An example is the large number of financial services companies (eg banks and insurance companies) which are headquartered in the City of London.

Footloose industries are those that are less dependent on factors that tie them to a specific geographical location. Unlike manufacturing industries, tertiary or services, companies do not have to be near a source of raw materials. As long as they have suitable transport, energy and communications links, they can locate themselves virtually anywhere in the world. Examples of footloose industries are computer software development, telephone sales and call centres.

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