Sectors of Economy

The discussion around the economy is a major thing globally and countries are racing towards improving their national economy by being more productive and increasing the living standards of their citizens. The industrialization has taken an upwards trend in the recent past and is growing tremendously. In the past, most nations depended on natural resources to trade and earn a living but with the coming of education and the expansion of industries, it is fair to say that all the sectors of the economy are well activated. So what are these sectors and what is their economic impact on a global scale?

In this economics essay, we will discuss the three major sectors of the economy that include:  primary, secondary and tertiary sectors. However, there are two minor sectors, that are players in the economy as well that is the quaternary and quinary sectors.  Our economics assignment writing service has prepared a sample essay about each of them individually to get a better picture of what I am talking about.

Primary Sector of Economy 

The primary sector, which is the basic sector. Is involved in the production and extraction of raw materials. This sector deals with farming, fishing, mining, hunting and even logging. However, this sector mostly benefits developing countries (third world countries) more than the already developed countries. Africa for one is a big dependent and beneficiary of this. On a global scale, the primary sector accounts for 7% of the total GDP. However, looking at the contribution of the primary sector to the GDP of each country towards this, countries such as China and the USA have 7.9% and 0.9% respectively while countries such as Mali and Kenya have 41.8% and 34.5% respectively.

However, the primary sector has very little to offer for sustainability. This is as a result of the technology and investment allocated to production. If developing countries, with all the resources they have, were given access to advanced machinery, then the profitability ratio could rise.

Secondary Sector of Economy 

The secondary sector of the economy is higher up the chain and focuses on the manufacturing sector. According to the three-sector model, these sectors are interdependent and the circular flow of income shows how inseparable they are. The primary sector majors in the production of raw materials that the secondary sector uses in making finished goods that are ready for consumption.

When you think of the automobile industry, textile industry, breweries, construction metal works ad all these industries, then you have the secondary sector in mind. Despite the fact that developing countries major in the primary sector, they also have all the other sectors but not on the same large scale. However, middle-class countries that have a higher rate of exports of manufactured goods tend to have a higher GDP. This is all thanks to advanced technology that allows them to convert their raw material to finished goods and from that value addition, higher-income is guaranteed.

On a global scale, the secondary sector accounts for 30% of the GDP. The secondary sector works to the advantage of developed countries as well, who source their raw materials from developing countries and turn them into finished goods and offer them back for exportation and use locally. Back to our statistical data comparison, as of 2017, China and the USA, they had 40.5% and 19.1% respectively while Mali and Kenya had 18.1% and 17.8% respectively.

According to the latest statistics (2020), China was in the lead with an industrial output of around 4.42 trillion. This, in comparison to their 14.72 trillion GDP accounts for 30%. However, this is a decrease due to the global Covid-19 pandemic.

Tertiary Sector of Economy 

Now, that we are down with raw materials and their manufacturing, the other sector is the tertiary sector and given that it is also called the service industry, it deals with the production of intangible goods. This sector is concerned with warehousing, the transport industry, healthcare, arts, pest control, entertainment and all other professional services. With the age of information and education at an all-time high, professionals have risen like never before. However, the production of information is no longer categorized under the tertiary sector. Many people tend to get the secondary and the tertiary sector mixed up as it might be hard to differentiate between the two, but, with the help of classification systems, it is made possible.

The tertiary sector, is higher up the ladder and is a more modern one and has gained popularity among developed countries due to its high return but it comes as a result of proper industrializations systems. China and the United States of America have some of the highest GDP globally and they have majored in this sector with 51.6% and 80 % of their GDP from this sector. While developing countries such as Mali and Kenya have 40.5% and 47.5% of their GDP from the tertiary sector. An analysis done by our assignment writers shows that developed countries derive most of their GDP from the tertiary sectors of the economy. For example, 75% of the UK workforce works in the tertiary sector.

Quaternary sector 

This sector of the economy deals with intellectual property and is also called the knowledge-based economy. The 21st century has seen a lot of this with an influx of information. The internet has become a large employer and with research, financial advice and planning, information sharing, content creation, blogging and even consultation are part of this. However, there are many more that fall under this. 2020 saw the rise of this industry drastically after most countries opted for national lockdowns that affected workflow and the education systems and as a supplement for this, the media and the internet found ways to manage this.

Research and development have been a major boost to this and integration of the same to the three major sectors have made the Quaternary sector an essential sector.

Quinary sector 

The quinary sector is a bit different from the rest and it comprises top-level decision-makers such as the government. Given that they are BIG players, they pull their weight and decisions made during legislation affect all other industries and could potentially suppress or boost an industry.

These sectors of the economy, all work together to bring together the economic structure which dictates the standards of living of people as well as the financial capacity of a country. These industries are quite volatile and factors such as drought, floods, inflation, pandemics and other uncertainties affect the market and change the tide. However, thanks to global bodies such as the United Nations and the World Bank proper planning is done to cushion these hard times.