Industrial Sectors Introduction

Industrial Sectors

• An organisation's specific environment is determined by the nature of the organisation, government involvement, and laws and regulations that apply.

Product or Service Provided

• The production of products and services can be divided into three sectors: primary, secondary, and tertiary.

Primary Sector

• Uses raw materials provided by nature, including mineral and agricultural products.
• Activities include mining, farming, fishing, forestry, and recycling.
• Provides products to the secondary sector or directly to consumers.
• Contribution to the economy decreases as the economy develops.

Secondary Sector

• Receives raw materials from the primary sector and processes them for consumption.
• Produces capital goods (e.g., photocopy machines, office furniture) and consumer goods (e.g., pencils, paper, petrol).
• Factories play a major role in this sector.
• Contribution to the economy decreases as the economy develops.

Tertiary Sector

• Provides auxiliary services to the primary and secondary sectors, including insurance, banking, wholesaling, retailing, transportation, and communication.
• Contribution to the economy increases as the economy develops.

Application of Laws and Regulations

Formal Sector

• Regulated through laws and regulations, with features including legal registration and taxation.
• Common in developed countries.

Informal Sector

• Businesses that have not complied with legal requirements, paid taxes, or registered.
• Common in developing countries, with examples including spaza shops, street vendors, unregistered taxis, and flea markets.

Government Involvement

Private Sector

• Refers to business enterprises owned by private individuals or groups.

Public Sector

• Consists of business entrepreneurs and bodies owned by the government, including central government, regional administration, local authorities, and state-owned enterprises.

The Public Sector and Business Associations

Government Departments

• Include Department of Trade and Industry, Department of Labour, and Department of Finance.
• Influence organisations in various ways.

Business Associations

• Voluntary associations that safeguard the common interests of their members.
• Examples include ESKOM, SABC,TELKOM, CSIR, and SABS.

Industrial Sectors

• The primary sector uses raw materials provided by nature, such as mineral and agricultural products.
• Examples of primary sector activities include mining, farming, fishing, and forestry.
• Recycling is becoming more important due to the depletion of raw materials.

Product or Service Provided

• The production of products and services can be divided into three sectors: primary, secondary, and tertiary.
• The primary sector provides its products to the secondary sector for further utilization or directly to the consumer for consumption.
• The contribution of the primary sector to the total economy of a country becomes less important as the economy develops from a mining and agricultural economy to an industrial economy.

Secondary Sector

• The secondary sector receives raw materials from the primary sector and processes them into a form more suitable for consumption, either by way of capital or consumer goods.
• Examples of secondary sector products include office furniture, pencils, and paper.
• The contribution of the secondary sector to the total economy of a country becomes less important as the economy develops from an industrial economy to a knowledge economy.

Tertiary Sector

• The tertiary sector provides auxiliary services to the primary and secondary sectors, such as insurance, banking, wholesaling, retailing, transportation, and communication.
• The contribution of the tertiary sector to the total economy of a country increases as the economy develops.

Formal and Informal Sector

• The formal sector comprises organizations that are legally registered, taxed, and comply with laws and regulations.
• The informal sector comprises businesses or organizations that have not complied with legal requirements, paid taxes, or registered.
• In a developed country, the formal sector is usually the biggest sector.

Government Involvement

• The public sector consists of business enterprises owned by the government, such as state departments, regional administration of the province, and local authorities.
• The private sector refers to all business enterprises owned by private individuals or groups.
• Government involvement in the economy includes legislation, ownership, and business associations.

Business Associations

• Business associations are voluntary organizations that aim to safeguard the common interests of their members.
• Examples of government departments that influence organizations include the Department of Trade and Industry, Department of Labour, and Department of Finance.
• Examples of business associations that influence business include ESKOM, SABC, TELKOM, CSIR, and SABS.