TOPIC 1 – THE INDUSTRY

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 What is industry?
• Industry is a group of productive enterprises or organizations that
produce or supply goods, services, or sources of income
• An industry involves in economic activities performed by people, and
organizations in producing goods and services for sale.
• Economic activity is the activities in producing, distributing, or
consuming products or services which involve money or the exchange of
products or services.
• An industry is a group of companies that are related based on their
primary or core business activities.
• Example of industries:
– Telecommunication industry - TM, Maxis, Celcom
– Education industry - UiTM, UKM, Taylor College, UTP
– Media and entertainment – Astro, TV3, RTM etc
– Food industry – Nestle, Adabi, Gardenia, Restaurants, etc
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 Industry
• In modern economies, there are dozens of industry classifications.
• Industry classifications are typically grouped into larger categories called
sectors.
– Primary sector of the economy (the raw materials industry)
– Secondary sector of the economy (manufacturing and construction)
– Tertiary sector of the economy (service industry)
– Quaternary sector of the economy (information services)
– Quinary sector of the economy (businesses and not-for-profit
organizations that focus on providing essential services such as public
services, education, and healthcare.
• Public services include non-profit government supported agencies such as
police forces, military, and firefighters)

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Industries are organized under different categories

• Heavy and light

• heavy industry sector would have much higher capital
requirements for a business to set up
• light industry sector would have much lower capital
requirements for a business to set up

• domestic and foreign

– domestic industries are those that are located within its
borders (country) .eg: Proton
– foreign sectors are those that are not located within a country
(oversea) eg: Microsoft

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 Industries are organized under different categories
• Durable and non-durable
– durable industry is one that produces goods that last a long
time. Eg: the automobile and aviation
– non-durable sector produces goods that usually do not last very
long, require immediate consumption, and are perishable.eg:
Food

• Manufacturing and construction

– Manufacturing industries are those that produce final
consumption goods, that end up in the customers’ hands for
consumption eg: food
– Construction is a high hazard industry which comprises a wide
range of activities involving plans, design, constructs, alteration,
maintains, repairs and eventually demolishes of buildings, civil
engineering works, and other similar works.
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 Industry
Heavy vs Domestic vs Durable vs Manufacturing vs
Industry
Light Foreign Non-durable Construction

Automobile Heavy Depends Durable Manufacturing

Clothing Light Depends Durable Manufacturing

Food Light Depends Non-durable Manufacturing

Services

Mining Heavy Depends Durable Construction

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 The Economic Sector
• An economy is a system that helps to produce goods and services and
enables people to earn their living.
• An economic activity takes place when resources such as capital goods,
labour, manufacturing techniques or intermediary products are combined
to produce specific goods or services.
• Thus, an economic activity is characterised by an input of resources, a
production process and an output of products (goods or services).
• Economy can be classified as five distinct examples of economic activities.
These activities are
– producing,
– supplying,
– buying,
– selling, and
– the consumption of goods and services.
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 Economic activities

buy Sale

Consume
Producing

Supply

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 Economic Resources
• Economic resources is the factors used in producing goods or
providing services

• Economic resources can be divided into:

– Human (Labor and management)
– Capital (Financial)
– Land (machinery, buildings)
– Technology (infrastructure).
– Natural resources eg: raw materials, fish, oil etc

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 The economic sector
4 Sectors of the Economy
•Primary sector
– which includes agriculture, mining and other natural resource industries;
– Extracts natural materials and provides raw materials for secondary industry.

•Secondary sector
– covering manufacturing, engineering and construction;
– processes raw materials or semi-finished goods into more valuable products.

•Tertiary sector
– involves the provision of services to other businesses as well as to final
consumers.
– Services may involve the transport, distribution and sale of goods from a
producer to a consumer
•Quaternary sector
– for intellectual activities involving education and research
– related to application, manipulation and transmission of information 10
Example of industries

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 Primary industry
• This sector of a nation’s economy includes agriculture, forestry, fishing,
mining, quarrying, and the extraction of minerals.
• It may be divided into two categories:
– genetic industry, including the production of raw materials that may be
increased by human intervention in the production process;
– extractive industry, including the production of exhaustible raw materials
that cannot be augmented through cultivation.

1. Agriculture
– Agriculture is an activities involve with
– cultivating soil; planting; raising, and harvesting crops; rearing, feeding,
and managing animals.
– Aquaculture: raising private aquatic animals (fish)
– Floriculture: growing flowering plants.
– Horticulture: growing fruits, vegetables, and plants.
• Some of the agriculture activities are done manually
• Agriculture Industry is always seeking to improve, by adopting new
technologies. 12
 Primary industry: Forestry
2. Forestry
• Forestry is the management of forested land together with associated
waters and wasteland, primarily for harvesting timber.
•This includes logging firms, manufacturers who use raw timber products
•the management of forested land, together with associated waters and
wasteland, primarily for harvesting timber.
•Modern forestry has evolved in parallel with natural resource management.
•Including activities related to the conservation of soil, water, and wildlife
resources and to recreation.

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 Primary industry: fishing
3. Fishing
•The fishing industry includes
– any industry or activity concerned with taking, culturing, processing,
preserving, storing, transporting, marketing or selling fish or fish
products
•The fishing industry involves
– catching, preparing and selling fish for consumer use.
– This industry starts with the fishermen out at sea on commercial fishing boats,
– it includes the landlocked countries that grow their own fish cultures for a
means of harvesting.
•Fishing industry engaged in the catching of fish, seals, whales, marine
invertebrates, and seaweed and their processing into
– various types of food, medical, feed, and industrial products.
•Commercial fishing, the taking of fish and other seafood and resources from
oceans, rivers, and lakes for the purpose of marketing them.
•Fishing is one of the earliest forms of human production.
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 Primary industry: Mining
4. Mining
•Mining industry consists of
– the search for, extraction, beneficiation, and processing of naturally occurring
solid minerals from the earth.
– These mined minerals include coal, metals such as iron, copper, or zinc, and
industrial minerals such as potash, limestone, and other crushed rocks.

•The mining industry in Malaysia is

– not the big business it used to be due to the collapse of the global tin
market in 1985.
– The industry was then overshadowed by industrialisation, the oil palm
industry and the oil and gas industry.
•Mined materials are needed to
– construct roads and hospitals, to build automobiles and houses, to
make computers and satellites, to generate electricity, and to provide
the many other goods and services that consumers enjoy.
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Secondary Industry
•Construction
• Manufacturing

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 Secondary Industry: Construction
• Construction is
– a high hazard industry that comprises a wide range of activities involving
construction, alteration, and/or repair.
– Examples include residential construction, bridge erection, roadway paving,
excavations, demolitions, and large scale painting job
• The construction industry is
– one of the most information-intensive industries, as a major construction
process requires extensive exchange of data and information between the
project’s participants on a regular basis.
• In the construction industry,
– employees must adopt new forms of technology to achieve the time, cost,
and quality goals of a construction project.
• During the construction phases
– the construction industry depends on large amounts of information.
– It’s important that the information provided to the construction site enables
task control, data integration, material and resource control, and
communication between the company and the suppliers.
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 Secondary Industry: Manufacturing
• Manufacturing industry
– refers to industries which involve in the manufacturing and
processing of items and indulge in either creation of new commodities
or in value addition.
• This sectors deals with production that process or reprocess
industrial and agricultural raw materials

• manufacturing industry deals

– with objects that are themselves already the products of labor.
– Manufacturing industry includes enterprises that produce
• Metals, chemical and petrochemical products, machinery and equipment;
• wood products, paper, and pulp; cement and other construction
materials; light industrial products; and foodstuffs.
• Enterprises that repair industrial products are also included.

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 Tertiary: Service industry
• Tertiary sector of the economy, generally known as the
service sector

• The tertiary industry is involved with the provision

of services to businesses as well as final consumers.
– It may happen in wholesaling and retailing, pest control or
entertainment.

• Services (also known as "intangible goods") include attention,

advice, access, experience and affective labor.

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 Tertiary: service industry
• Activities in the service sector include
• retail,
• banks,
• hotels,
• real estate,
• education,
• health,
• social work,
• computer services,
• recreation,
• media,
• communications,
• electricity, gas
• water supply. 20
 Tertiary: service industry

• Tertiary sector has become important because :

– Basic services like hospitals, education, post and telegraph,
courts, etc. are the responsibility of the government in
developing countries.
– Demand for services such as transport, trade, storage will
increase with the development of primary and secondary
sectors.
– Demand for tourism, shopping, private schools, private
hospitals, etc. increases with the increase in the level of income.
– Rapid growth of services sector also benefitted from external
demand such as software industry and call centre services.
– financial sector provided an environment for faster growth of
financial services.

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 Quartenary Sector (Industry)

• The quaternary sector is a knowledge-based part of the

economy - which typically includes services such as
– Financial planning, information generation, consultancy,
information technologies, designing, education, research and
development (R&D) etc

• The quaternary sector also known as Knowledge-based

industry

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 Quartenary Sector (Industry)
• Finance
– encompasses a broad range of businesses that manage money,
– including credit unions, banks, credit-card companies, insurance
companies, accountancy companies, consumer-finance companies,
stock brokerages, investment funds, individual managers and some
government-sponsored enterprises
or
• Insurance
– refers to a collection of companies that manage risk for individual
health and property by promising to reimburse policyholders for
losses in exchange for regular payments.
– The industry is divided into three distinct segments:
• life insurance , health insurance, and liability insurance.real estate

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 Quartenary Sector (Industry)

• Healthcare
– Also called as medical economy
– provides goods and services to treat patients with curative, preventive
, rehabilitative, and palliative care.
– It includes the generation and commercialization of goods and
services lending themselves to maintaining and re-establishing health.

• 2 types of healthcare industry

– First - healthcare equipment and services, is comprised of companies
that provide medical equipment, medical supplies, and health care,
such as hospitals, home health care providers, private medical
practices and nursing homes
– Second - Produce biotechnology, pharmaceuticals, and
miscellaneous scientific services.
– The pharmaceutical industry is the development and sale of
medication 24
 Quartenary Sector (Industry)
• ICT Services
• The convergence of the telecommunications industry
– with the computing and broadcasting industries resulted in a broader
definition of Information and Communications Technologies (ICT).

• the integration of telecommunications (telephone lines and wireless

signals) and computers, as well as necessary enterprise software,
middleware, storage, and audiovisual systems, that enable users to
access, store, transmit, and manipulate information.

• The term ICT is also used to refer to the convergence of audiovisual and
telephone networks with computer networks through a single cabling or
link system

• It covers any product that will store, retrieve, manipulate, transmit, or

receive information electronically in a digital form (e.g., personal
computers, digital television, email, or robots
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