Industry PDF

## 2.2 INDUSTRY Industry is that part of business activities which is concerned with production of goods and services. It is a productive occupation. In a broader sense, it uses the methods of raising, producing, processing or fabrication of products. The goods and services produced by an industry...

## 2.2 INDUSTRY Industry is that part of business activities which is concerned with production of goods and services. It is a productive occupation. In a broader sense, it uses the methods of raising, producing, processing or fabrication of products. The goods and services produced by an industry may be either consumers' goods or producers' goods. Consumers' goods are used by the final consumers while producers' goods are used by the businessmen, for further production. The example of consumers' goods are edible oil, cloth, television, radio, foot wears, motor vehicles, refrigerators etc. On the other hand, the example of producers' goods are machines, tools, and equipment, ships, rail engines etc. These goods are also called capital goods. ### 2.2.1 Characteristics of industry The characteristic features of industry are as follows- * Industries create form utility. Form utility refers to conversion of raw materials into finished products. * Industry is concerned with the raising, producing, processing or fabrication of goods and services. * The goods produced by the industry may be consumer goods or capital goods. * Industry undertakes the production of goods and services for the purpose of sale. * Industry undertakes recurrent or regular production. * Industry produces with the object of making profit. * Industry requires capital investment. * Industry involves an element of risk. ### 2.2.2 Types of industries Industries may be classified on the basis of production of goods or production of services. Depending upon the types of goods produced, industry may be sub-divided into primary or secondary industry. Likewise services may be grouped into personal and non-personal. The primary industry may again be divided into (a) Extractive and (b) Genetic industry. Secondary industry can be either (a) manufacturing and (b) construction industry. Thus industry can be classified under five broad heads, such as: 1. Extractive industry 2. Genetic industry 3. Manufacturing industry 4. Construction industry 5. Service industry (Personal & Non-personal) #### 1. Extractive Industry These industries are involved with the extraction of products from nature. They are concerned with production of wealth from soil, air, water and from beneath the surface of the earth. The examples are: mining, agriculture, fishing, lumbering, hunting, fruit gathering etc. the products of extractive industries may also be used as raw materials for manufacturing and construction industries. Moreover, these are used as finished products by consumers. #### 2. Genetic Industry Genetic means generation out of the genes of plants and animals. These industries are mainly concerned with breeding of plants or animals, and related to reproduction. Examples of these industries are nurseries raising seedlings and plants, cattle breeding, poultry farming, fish hatchery, or pisciculture goatery, piggery etc. #### 3. Manufacturing Industry This industry is mainly engaged in manufacturing of physical goods like consumers' goods, producers' goods or basic and heavy goods. The manufacturing activity actually converts raw materials and semi-finished products into finished products. In this process, these industries create form utility in goods. Most of the products used by the consumers are the outcome of manufacturing industries. Generally, the products of extractive industries are the raw materials of manufacturing industries. For example: conversion of raw cotton into cotton textiles, production of sugar from sugarcane, production of iron and steel from iron ore etc. Manufacturing industries may be sub-divided into five types. They are (a) Analytical industries (b) Synthetic industries (c) Processing industries (d) Assembling industries and (e) Integrated industries. (a) **Analytical Industries**: Analytical industries are those which employ analytic processes in the manufacturing of goods. Analytic processes break a basic raw material into two or more products. The best example is oil refineries where the same crude oil is analyzed and separated into different products like petrol, diesel, kerosene, lubricating oil etc. (b) **Synthetic Industries**: Synthetic industries refer to those manufacturing industries where many raw materials are combined together in production process to make a final product. The examples are: cement industry, soap industry, paper and plastic industry etc. Here the used raw materials lose their identity completely in the final product. (c) **Processing Industries**: In this industry, the raw materials are processed i.e. passed through different stages of manufacturing to become a finished product. For example, in case of textile industry, the cotton passes through ginning fabricating, weaving and dyeing processes to make cloth. The other examples are sugar, paper, rolling mills, pottery, brick making etc. (d) **Assembling Industries**: Assembling industries are those where different component parts already manufactured are assembled into final products. The examples of such industries are automobile industry, television industry, computer industry etc. Here the used raw materials do not lose their identity in the final product. (e) **Integrated Industries**: Integrated industries are those manufacturing industries, where processing and assembling are done under one enterprise. The example are: rubber, iron and steel. #### 4. Construction Industry Construction industries are engaged in the creation of infrastructure such as construction of buildings, roads, dams, bridges, canals, railway lines, tunnels, ports etc. The important feature of this industry is that these constructions are erected, built or fabricated at a fixed site. They cannot be brought to the market for sale. Another feature is, these industries use the products of extractive industry like quarries and manufacturing industries like bricks, cement, iron and steel, plastic products, pipelines etc. #### 5. Service Industries Unlike other industries discussed above which produce tangible products, the service industries produce only intangible products. The intangible products are those which do not have any physical form and cannot be stored for future consumption. The services produced may be 'personal', like services dyers and cleaners, beauticians etc or 'non-personal', like banking, advertising, transportation, insurance etc.