The tertiary sector is engaged with service providers that include financial organizations, entertainment firms, and retailers. That is why businesses in the secondary sector are more available in developed economies. Moreover, the secondary sector requires the use of more modern technologies for its existence. The secondary sector of economies is more advanced than the primary sector in general. The business activities included in the secondary sector are shipbuilding, automobile manufacturing, textile, chemical engineering, aerospace, space, and energy utilities. It should be noted that the companies in the secondary sector are dependent on the primary sector for its well-functioning. This sector comprises mainly manufacturing, processing, and construction firms. The secondary sector of economies is engaged in the production of goods with the resources collected in the primary sector. They are primarily involved in the extraction and use of primary resources that are available naturally more than in developed economies. It has been observed that developing nations fall majorly in the primary sector of economic activities. The primary sector includes business activities in the areas of agriculture,k fishing, quarrying, mining, forestry, and hunting. It is notable that companies that process and pack raw materials are also included in the primary sector category. These companies sell the extracted raw materials to consumers for commercial or business purposes. They do not engage in the production of anything new. The companies in the primary sector are involved in the extraction and harvesting of natural products or raw materials from the Earth. Four Main Economic SectorsĮconomic sectors are divided into four categories which are the following: So, we may conclude that the more the number of sectors in the economy the better the chances of the economy to get developed. For example, while most African economies are involved in the extraction of raw materials, the US economy has a representation of energy, technology, financial services, and other sectors of the economy. The developed nations on the other hand have more sectors in their economy. For example, the extraction of raw materials is the earliest phase of a specific sector while using these raw materials in manufacturing may represent another sector.ĭeveloping or emerging economies usually have a few sectors in their economy.įor example, some developing nations have a sector for the extraction and sale of crude oil. While one sector may include the earliest stages of the business cycle, other sectors may be formed for activities that are related to later stages of the business. Sectors are meant to classify economic activity by dividing them into various groups. Dividing sectors into sub-sectors help investors and economists monitor the activities in these sub-sectors more closely which helps in forecasting and decision-making regarding investments in stocks and shares of selected sub-sectors. These sub-sectors are called investment sectors. In financial markets, sectors are further divided into sub-sectors, such as technology, financial services, realty, etc. This is specifically called sector analysis. They can understand whether businesses in a sector are expanding or contracting by analyzing sectors. Sectors usually present a large group of companies that are involved in similar business activities.Įxamples of sectors include the extraction of natural resources and mining.ĭividing economies into sectors help economists judge the condition of the businesses that are included in the sectors. Businesses in the same or similar business activities, products, or services form sectors in the economy.
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