SECONDARY SECTOR: CHARACTERISTICS, ECONOMIC ACTIVITIES, EXAMPLES - ECONOMY - 2025

The secondary sector is the segment of an economy that includes all industries that manufacture, from raw materials, a usable finished product, or that are involved in construction.

This sector is often divided into heavy industry and light industry. Most of these industries require machinery and factories and consume large amounts of energy to transform raw materials into products, creating waste heat and waste that can contribute to environmental pollution.

Source: pixabay.com

The secondary sector supports both the primary and tertiary sectors. It generally takes what the primary sector produces and manufactures finished products that are suitable for use by other companies, for export, or for sale to local consumers.

This sector is an important source of engineering job opportunities. Among developed countries, it is an important source of well-paying jobs for the middle class, to facilitate greater social mobility in successive generations of the economy.

Producer of economic wealth

Some economists compare the wealth-producing sector in an economy, such as the industrial sector, with the service sector, which consumes that wealth. Examples of service include government, insurance, and retail.

These economists claim that an economy begins to decline as its wealth-producing sector contracts. Therefore, manufacturing is an important activity to stimulate economic growth and development.

Manufacturing-exporting countries tend to deliver higher marginal GDP growth, supporting the marginal tax revenue needed to invest in quality-of-life initiatives, such as infrastructure in the economy and healthcare.

characteristics

- It diversifies the economy in such a way that it does not have to depend on primary products.

- As there is greater added value, manufacturing allows higher real wages than in agriculture.

- Working in factories is boring and repetitive, workers could become alienated.

- It allows countries to specialize and benefit from economies of scale.

- Developing economies may lack the necessary human capital and have to import workers and machines, which could be very costly.

- Contamination occurs in the production process.

Most economies in their development process go through the intermediate phase, where the secondary sector becomes the largest sector of the economy in terms of production and employment, with the reduction in importance of the primary sector.

Manufacturing

Manufacturing refers to the production of goods from raw materials. The literal meaning of manufacturing is "to do it by hand", however, this term today also includes manufacturing by machines.

The key characteristics of modern large-scale manufacturing include specialization of skills and production methods, mechanization, technological innovation, and organizational structure.

Determining factors for the operation

Most manufacturing unit concentrations in order to operate efficiently require the following factors:

Market existence

The existence of a market for manufactured products is the most important factor for the operation of industries.

Market means that people demand these goods and that they also have the ability to buy them from sellers in a place.

Access to raw materials

The raw material used by the industries must be cheap and easy to transport. Industries based on inexpensive, bulky, or weight-loss materials should be close to raw material sources, such as the steel, sugar, and cement industries.

Job offer

The labor supply is an important factor in the operation of industries. Some types of manufacturing still require skilled labor.

Energy sources

Industries that use the most energy are close to the source of energy supply, such as the aluminum industry.

Government policies

Governments adopt regional policies to promote balanced economic development. Therefore, industries are established in particular areas.

Economic activities

The secondary sector is often divided into heavy industry and light industry. Each company, organization or professional group, chamber or union can also have its own classification.

A basic list of the manufacturing and industry sector, which is part of the secondary sector, is as follows:

- Electrical industry.

- Chemical industry.

- The energy industry.

- Metallurgical industry.

- Construction Industry.

- The glass industry.

- Textile and clothing industry.

Manufacture

The manufacture of physical products such as vehicles, furniture, and household items. Manufacturing is often done on a large scale, in large, highly automated factories that have the ability to offer a low unit cost.

Mass consumer products

The manufacture and marketing of products that are consumed quickly, in such a way that people need to buy them regularly, such as food, cosmetics, cleaning supplies and sweets.

The consumer goods industry is dominated by large brands with immense production and logistics capabilities.

Building

The construction of houses, buildings and other structures such as transportation infrastructure.

Heavy industry

Heavy industry is the construction of large facilities, such as a hydroelectric dam, and the manufacture of large products, such as aircraft.

Food industry

It is dedicated to the production of food and beverages, such as a bakery or a brewery.

fashion

The design, production and marketing of clothing, footwear and other items that people wear.

Crafts

Handmade production, such as the craftsman who manually produces traditional jewelry.

Example of international companies in the secondary sector

Boeing

It is the leading manufacturer of commercial aircraft, defense and security systems, as well as the largest aerospace company in the world.

As the largest US manufacturing exporter, Boeing's products and services include military and commercial aircraft, satellites, and a wide range of systems including electronic, defense, launch, communication and information systems.

Ford Motors

The company revolutionized the global automotive industry and manufacturing processes by mass producing its first car, the Ford Model T. The integrated assembly line, located at Ford's first Michigan factory, became a model for production in modern dough.

Ford produces about 6.7 million cars and employs 200,000 employees as of 2018. It has more than 90 manufacturing plants around the world.

General Motors

It is one of the largest automobile manufacturers in the world and has operations in more than 35 countries around the world.

Its corporate structure is diversified into four manufacturing subsidiaries, GMC, Buick, Cadillac and Chevrolet, which produce iconic cars.

The company employs more than 180,000 people in 400 facilities around the world, manufactures around 9 million vehicles each year.

General Electric

It is one of the largest manufacturing companies in the world. It focuses on aviation, healthcare, power, renewable energy, digital manufacturing, lighting, transportation, oil and gas.

Manzana

The famous American technology company develops and sells consumer electronics (iPhone, iPod, iPad), as well as computer software. Possibly it will include augmented reality in its devices in the near future.

The intense research and design development carried out by the company has played a key role in the history of world technology, especially in the mass production and consumption of smartphones and personal devices.

Examples of secondary sector products

In addition to the goods produced by the companies in the previous section, the following are examples of products produced by the secondary sector:

Clay crafts

Clay is a material that is extracted from the earth. Once processed by man to obtain a useful product (such as plates, cups, among others), it becomes a capital good.

The cigarette

The tobacco plant is extracted from the ground and its dried leaves are wrapped in thin paper, shaping a cylinder. At one end a filter is added and it is ready for consumption.

Footwear

After obtaining the skins, they are used in the manufacture of shoes, either by manual, industrialized or automated process.

Clothing or garments

The textile industry is part of the secondary sector, as well as large-volume clothing factories.

Juice bottling machines

The fruits are extracted from the field and processed by machines to extract the juice, which is then packaged for human consumption.

Drinking water

The pollution of rivers and lakes has produced the reduction of spaces for obtaining water suitable for human consumption. For this reason, the installation and manufacture of water purification plants is required.

Home appliances

These products were initially made at home, to facilitate some specific work at home.

Then some prototypes were made, until the artifacts were mass produced and marketed according to the brands.

Cars

This sector of the industry is very broad. In this, a great variety of materials are consumed for the assembly of each vehicle, even more so when large volumes are produced in various production lines.

Pharmacy

In the pharmaceutical industry, drugs are manufactured in series. For this, the chemicals that must go through phases of weighing, granulation, drying, sieving, mixing, compression and coating are processed, to obtain the necessary drugs for consumption.

Sheets

Wood is obtained from trees and cellulose fibers are extracted from this. The cellulose is mixed with water in a pulper.

This mixture is placed on a belt that has rollers. Little by little the water is extracted until a roll of paper is obtained.

Toys

The manufacture of these products mixes different materials during the production and assembly process.

In the past the process was artisanal, but today there are machinery for mass production.

Bread

The preparation of the dough is the same for a domestic or industrial process. This area has largely evolved through the use of kneading, molding and baking machines, greatly increasing production.

Cement

The large cement mixing machines have been very useful for the construction area in its different areas.

Importance

The secondary sector is the most important sector in an economy. According to economic theory, countries that depend on agriculture and its associated activities (primary sector) grow slowly and thus remain underdeveloped or developing economies. They only export raw materials to the rest of the world.

The secondary sector forms a substantial part of GDP, creates products, and is the engine of economic growth. It is crucial for all developed economies, although the trend in most developed countries is for the tertiary sector to predominate.

Contribution to other sectors

The secondary sector depends on the primary sector, but after the materials are processed in the industries, their added value is much higher, which leads to higher profitability.

It generates more jobs in the economy and helps to rapidly improve people's living standards and per capita income.

Similarly, the service sector also progresses with improvement in industries. Therefore, the secondary sector is the most important for growth and the economy in general.

Industrial activities use materials produced in the primary sector and manufacture finished products for consumption. In the process, massive employment is created at different scales. The service sector, such as transportation, the retail market, etc., is also encouraged to prosper.

As all sectors of the economy are interdependent, the secondary sector makes a great contribution to the sustenance and growth of the other sectors. It induces the growth and productivity of the primary sector and also helps to nurture the tertiary sector.

Development of the economy

The development of the secondary sector can be attributed to the demand for more products and food, which led to industrialization.

Although the primary sector is vital, there is a natural limit on how much can be extracted from this sector.

However, when the economy moves towards the secondary sector, new agricultural techniques are used and industrialization becomes dominant, since goods can be transformed into necessary items, for distribution and sale.

Without the secondary sector there would be no cars, no machines for the construction sector, no computers, no smart phones, no new roads.

Undoubtedly, this sector must be more respectful with the environment, but if you look around and imagine a world without polluting factories, you would have to go back to 1800.

References

1. Wikipedia, the free encyclopedia (2019). Secondary sector of the economy. Taken from: en.wikipedia.org.
2. Management Mania (2019). Secondary Sector (Manufacturing and Industry). Taken from: managementmania.com.
3. Tejvan Pettinger (2017). Manufacturing - Secondary sector. Economics Help. Taken from: economicshelp.org.
4. GK Today (2019). Secondary Sector. Taken from: gktoday.in.
5. John Spacey (2019). 7 Examples of Secondary Industries. Taken from: simplicable.com.
6. Quora (2019). What is the importance of the Secondary Sector? Taken from: quora.com.
7. Manufacturing Global (2019). Top Ten Manufacturing Companies in the US Taken from: manufacturingglobal.com.