ENTREPRENEURSHIP: SECTORS OF THE ECONOMY

 Sector: a way of grouping business activities

• SECTORS OF THE ECONOMY
 Primary Sector
 Secondary Sector
 Tertiary Sector
PRIMARY SECTOR
• The Primary Sector is that part of the economy where businesses grow,
collect, mine, or cut down raw materials
• Raw materials are needed to make other goods and services –
• E.g. wheat, cattle, fish, timber, coal, oil and gas etc.
• Major businesses in this sector include agriculture, fishing, forestry and all
mining and quarrying industries
• The primary sector of industry is also called extraction.
• It generally involves changing natural resources into primary products.
• Most products from this sector are considered raw materials for other
industries.
• Farming involves growing crops and rearing animals (cattle), providing food,
wool and skins.
• Mining involves extracting raw materials - oil and coal, for example - from the
earth (or under the sea).
• Fishing involves catching sea life.
• In developed and developing countries, a decreasing proportion of workers are
involved in the primary sector.
ROLE OF THE PRIMARY SECTOR
• Creates income – contribute the country’s GDP
• Source of employment
• Earner of foreign exchange
• Agriculture produces food which is regarded important for a country’s
independence from the rest of the world
• Mining encourages the development of technology.
• Contributes to the development of the infrastructure in SA
• Gold as the major earner of foreign exchange
SKILLS IN THE PRIMARY SECTOR
• Most workers in the primary sector is unskilled
• Only 4% is skilled in the agricultural sector and
• 8% in the mining sector
• This sector is becoming mechanised
• This means labour is replaced by the use of machines
SUSTAINABLE USE OF RESOURCES IN THE PRIMARY SECTOR
 • Sustainability is meeting the needs of today without compromising the
needs of tomorrow.
• e.g. Harvesting trees but replanting
• Extraction of resources must be a slower space so that nature is able to
reproduce them.
• Conservation of the biological and landscape diversity
• Quotas place especially on sea foods
• Organic food – people to plant own foods
• Provision of sustainable energy to reduce dependence on oil
• More forests
SECONDARY SECTOR
• The Secondary Sector (Manufacturing) is that part of the economy where
businesses take the raw materials produced in the Primary Sector and
transform them into goods
• Goods are physical products that can be seen + touched.
• The secondary sector (manufacturing) produces finished, usable products.
• This sector of industry generally takes the output of the primary sector and
manufactures finished goods or where they are suitable for use by other
businesses, for export, or sale to domestic consumers
• Automobile manufacturing, Brewing industry, Chemical industry, Clothing
industry, Electronics, Engineering, Energy industries, Metalworking, Steel
production, Software engineering, Telecommunications Industry, Fruit Canning
industry
• Processing raw materials (from the primary sector), such as refining oil into
petrol.
• •Manufacturing - making products from raw materials (or other manufactured
products), such as cars.
• •Construction - for example, using raw materials, such as wood and stone, to
build houses.
• •Textiles - making clothing products from raw materials, such as wool, or
manmade materials, such as plastics.
ROLE OF THE SECONDARY SECTOR
• Creates income – contribution to the GDP
• Provides employment
• Contributes to the technological innovation
• Manufactured goods imported – net consumer of foreign exchange
• Increases the standard of living
• Creation of differentiated economy
 • Earner of foreign exchange
• Important source of state revenue
• Contribution to the leadership position in SA
SKILLS IN THE SECONDARY SECTOR
• Factory workers whom are either unskilled or semi-skilled
• 17% is unskilled
• Workers that have admin work in officers are skilled
• Workers such as packers tend to so the same job over and over tend to
become frustrated in their jobs
SUSTAINABLE USE OF RESOURCES IN THE SECONDARY SECTOR
• Management of natural resources:
• Effective use of natural resources
• No wastage of resources
• Do not contribute to pollution that destroys the environment
• No not produce harmful products
TERTIARY SECTOR
• The Tertiary Sector is that part of the economy where businesses produce
services
• Services are non-physical products that cannot be touched or stored like a
haircut or a train journey
• The tertiary sector of industry is also known as the service sector or the
service industry.
• It involves the provision of services to businesses as well as final consumers.
• Services may involve the transport, distribution and sale of goods from
producer to a consumer, or may involve the provision of a service, such as in
pest control or entertainment.
• Goods may be transformed in the process of providing a service, as happens
in the restaurant industry or in equipment repair.
• However, the focus is on people interacting with people and serving the
customer rather than transforming physical goods
• News media, Leisure industry/hotels, Consulting, Healthcare/hospitals, Waste
disposal, Estate agents, Business services, Restaurants, Local government
services, Central government services, Education, Law and order
• Retail is selling goods produced by the secondary sector in shops.
• Tourism is providing services to people who are travelling for fun.
• Education is teaching people new skills in schools and colleges.
• Health is providing services to sick people.
• Banking is providing financial services, such as lending people money and
helping them to invest their money
 ROLE OF TERTIARY SECTOR
• Creates income – contribution to the GDP
• Provides employment
• Contributes to the technological innovation
• Source of capital formation
• Stability order and progress of community
• Geographical division of labour due to transport
• Also can increase turnover of products
• Essential link between production, distribution and consumption
• Important effect on policies and strategies of a country
• Liaison with foreign countries – communication
• Capital formation
• Efficient market functioning
SKILLS IN THE TERTIARY SECTOR
• Skilled and semi-skilled workers
• The advance in technology creates an environment for skilled workers
• The workers are well educated with computer literacy and the ability to use
different technologies
SUSTAINABLE USE OF RESOURCES IN THE TERTIARY SECTOR
• Recycling of materials
• The use of paper bags instead of plastic bags
• Securing a sustainable supply chain – it is important to know by what and by
whom goods and services are produced.
• Greening offices and its environment
• Proper use of technological innovations. Responsible disuse and dumping
of software and hardware parts.
INTERRELATIONSHIP BETWEEN SECTORS
• Raw materials are collected, taken to manufacturing for processing into a
finished product, and this finished product is distributed through the market.
Raw Material  Factory  Juice Shop
PRIMARY SECONDARY TERTIARY

• The cost of the finished product is a function of the cost of raw material
extraction, transportation to manufacturing, processing, and the cost of
distributing the finished product to the market.
 CHAIN OF PRODUCTION
• A typical chain of production looks like this:

EXAMPLE:
Activity 1:
Activity 2: