Secondary Activities
All economic activities, from farming to banking, are about using resources to meet our needs. Secondary activities are the next step after primary activities (like farming or mining). They take natural resources and transform them into more valuable, finished products. This process of transformation is what adds value.
Secondary activities include manufacturing, processing, and construction (like building roads and bridges).
Manufacturing is the process of turning raw materials into finished goods for sale. This can range from simple handicrafts made at home to complex operations like building a space vehicle.
The core characteristics of modern manufacturing are:
The word "manufacturing" literally means "to make by hand," which reflects its origins. Today, however, it almost always involves machines.
Conceptually, an industry is a specific manufacturing unit located in one place, with its own management and records. However, we often use the term more broadly, as in the "steel industry" or "chemical industry," to refer to the entire sector. To be clear, the text uses the term ‘manufacturing industry’.
Modern, large-scale manufacturing has several distinct features that set it apart from older methods.
Mechanisation simply means using machines or gadgets to perform tasks. The most advanced stage of this is automation, where the manufacturing process happens without direct human thinking or control. Modern factories use computer-controlled systems and machines that are developed to "think" and adjust on their own.
To stay competitive, modern industries rely heavily on technological innovation. Through research and development (R&D), companies find new ways to:
Modern manufacturing is complex. It requires:
The goal is to produce more goods with less effort and at a lower cost.
Modern manufacturing is not spread evenly across the globe. It is highly concentrated in a few places, covering less than 10% of the world's land area. These regions have become the world's centres of economic and political power.
The main goal of any industry is to maximise profit by keeping costs as low as possible. Therefore, they choose locations where production costs are at a minimum. Several factors influence this decision.
A market is not just a place, but people who have a demand for goods and the money to buy them. This is the most important factor.
Industries that use cheap, bulky, and weight-losing raw materials (where the final product is lighter than the raw material) tend to locate close to the source.
While increasing automation has reduced the dependence on labour, it remains an important factor, especially for industries that require skilled workers.
Industries that consume a lot of power, like the aluminium industry, are located close to energy sources. Historically, coal was the main source, but today hydroelectricity and petroleum are also crucial.
Industries need efficient transport to bring in raw materials and ship out finished goods.
Governments often use regional policies to encourage industries to set up in certain areas to promote balanced economic development across the country.
Industries often benefit from being located close to each other. These benefits are called agglomeration economies. When industries are clustered together, they can share services, infrastructure, and a skilled labour pool, which helps reduce costs.
Foot loose industries are not tied to any specific location. They are not dependent on a particular raw material.
Industries can be classified based on their size, the raw materials they use (inputs), their final products (outputs), and their ownership.
Size is determined by the amount of capital invested, the number of workers, and the volume of production.
This is the smallest type of manufacturing unit.
This is a step up from cottage industries.
This type of manufacturing requires:
This system developed over the last 200 years, starting in the U.K., north-eastern U.S.A., and Europe. Today, major industrial regions are of two types:
These industries process raw materials from agriculture.
These industries use minerals as their raw material.
These industries use natural chemical minerals or materials derived from other sources.
These industries rely on products from forests.
These industries use animal products as raw materials.
Industries can also be classified by what they produce.
Basic Industries: These industries produce goods that are used as raw materials by other industries. [!example] An iron and steel industry is a basic industry. It produces steel, which is then used by another industry to make machines. Those machines might then be used in a textile factory to make clothes for consumers.
Consumer Goods Industries: These are also called non-basic industries. They produce goods that are consumed directly by people. [!example] Industries that make bread, biscuits, tea, soap, paper, and televisions are all consumer goods industries.
These are owned and managed by governments. In countries with socialist economies, many industries are state-owned. Mixed economies have both public and private sectors.
These are owned by individual investors or private organisations. In capitalist countries, most industries are privately owned.
These are managed by joint stock companies or are established and managed by a partnership between the private and public sectors.
High technology, or high-tech, is the latest generation of manufacturing.
The physical landscape of high-tech industry is different from traditional industry. Instead of massive factories, you see neatly spaced, modern, low-rise buildings that are a mix of office, plant, and lab space, often located in planned business parks.
Technopolies are regions where high-tech industries are concentrated. They are self-sustained and highly specialised.
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