Classification of Business
What are the different sectors within the economy?
Organizations that consist within the Primary sector are usually involved with the extraction of raw materials or natural resources from the Earth. Examples of companies within this sector are companies that are involved with mining, agriculture, and other means to generate natural resources.
Organizations that consist within the secondary sector are usually involved with the production of goods. They take resources from companies within the Primary sector and convert them into different products ready for distribution. For example, a company producing laptops could consist within the Secondary sector as it is manufacturing a product taking natural resources from the Primary sector.
Organizations that consist within the tertiary sector are usually involved with the process of distribution of goods and services. For example, a supermarket would be classified as a company within the tertiary sector as they are involved with distributing goods to its customers.
The importance of the sectors varies from country to country. The first factor could be that land could be very expensive, causing factories from the secondary sector to choose different locations. Another factor could be if a country producing oil runs out of oil, then it is possible that the extraction companies that belong to the primary sector could close down or move to another country.
When there is a decline in the importance of the secondary sector in a country. This is often cause by a recession, due to economic issues or global pandemics.
Public and Private Sectors
A company belonging to the private sector is owned by an individual and is held accountable for its work. However, a company that belongs to the private sector is state-owned, so it is run and managed by the government.
An economic system that consists of both private and public companies. This would mean that the government would most likely rely on both sectors.