Industry is split into three sectors, the
primary sector, the
secondary sector and the
tertiary sector.
Each company at each stage adds value to resources as they are transformed into new products and services. The total value of all production in an economy for a year is the Gross National Product(GNP).
Primary production is the sector involved with extracting natural resources from land so they can be used in the secondary stage of production. Things classed as primary production include extraction of oil and minerals, the growth of food crops, and the raising of animal livestock. In developed economies the primary sector is small in terms of output and labour employed, but in less developed economies it is larger on both counts.
Secondary production is the stage at which resources are converted into finished or semifinished goods. This includes the manufacturing industry, the construction industry, public utilities and the nationalized industries. While still an important phase in developed economies, its importance has declined in relation to the tertiary sector as these economies much into a postindustrial stage. Increasing competition is also coming from newly industrialised economies such as Korea, Hong Kong and Singapore.
The tertiary sector is the sector which provides services to support the other two sectors, including things like administration, transport, professional services, distribution, and retail. The sector has grown in importance in terms of both output and employment in developed economies, and is the most labour-intensive of the three sectors. The tertiary sector represents an important part of domestic production, and through exports helps to increase earnings from overseas.