Industry: Meaning and Classification

Industry refers to that branch of economic activity which is concerned with the raising, producing, processing or fabricating of products — that is, converting raw materials and natural resources into goods that are useful to people, or extracting resources directly from nature. Industry represents the production side of business: it is where goods actually come into being before they ever reach a shop or a consumer.

For Andhra Pradesh Intermediate commerce students, industry is classified into three broad categories based on the nature of the activity performed: primary, secondary and tertiary.

1. Primary industry is concerned with the extraction or production of natural resources and is further divided into two types:

• Extractive industries draw out or win products from the soil, air, water or the earth's crust. Examples include mining (coal, iron ore), fishing, hunting, forestry (timber collection) and agriculture.
• Genetic industries are engaged in breeding and multiplying certain species of plants and animals with the object of earning a profit from their sale. Examples include cattle breeding farms, poultry farms, plant nurseries, seed-production farms and fish hatcheries.

2. Secondary industry takes the output of primary industries as its raw material and converts it into a finished or semi-finished form that is more useful to the consumer. It has two branches:

• Manufacturing industries change the form or composition of raw materials into finished goods — for example, converting sugarcane into sugar, cotton into cloth, or iron ore into steel. Manufacturing may itself be analytical (separating a raw material into several products, as crude oil is refined into petrol, diesel and kerosene), synthetic (combining several materials into one product, as cement is made from limestone, clay and gypsum), processing (successive treatment of the same material, as in rice milling), or assembling (putting together several parts, as in a bicycle or a fan).
• Construction industries are engaged in the construction of buildings, dams, bridges, roads and canals. They are treated separately from manufacturing because their product is fixed at a particular site and cannot be moved to the market like an ordinary manufactured good. …