CLASSIFICATION:

PRIMARY:

• It involves the earth’s natural resources/extraction of materials like gold. 
• Examples include fishing, farming, and mining

SECONDARY:

• It involves taking materials provided by primary and converting them into manufactured goods.
• Examples include building, construction, and canning food

TERTIARY:

• It involves providing services to consumers and/or other businesses
• Examples include banking, retailing, hair dressing, and hotels

*Overall example: extracting wood (primary) —-> furniture makers make a sofa (secondary) —-> retailers sell sofa (tertiary)

PRIMARY —-> SECONDARY —-> TERTIARY = CHAIN OF PRODUCTION

—-> Results: country X focuses more on extracting oil than making manufactured goods, so it is known as a developing country. On the other hand, country Y provides more services so it is known as a developed country.

NOTE:

Underdeveloped —-> Primary sector

INDUSTRIALIZATION OCCURS (a business goes from primary to secondary)

Developing —-> Secondary sector

DE-INDUSTRIALIZATION OCCUS (a business goes from secondary to tertiary)

Developed —-> Tertiary sector

CHANGES IN SECTOR IMPORTANCE:

• De-industrialization: decline in the manufacturing/secondary sector of the industry and shift to the tertiary

WHY DO THESE CHANGES HAPPEN?

1. Sources of primary products have become depleted (example: cutting trees)
2. Developed countries lose competitiveness in manufacturing due to new industrial countries
3. As the countries wealth increases, consumers would rather spend their income on services rather than the primary sector

MIXED ECONOMY:

PRIVATE SECTOR:

• Not owned by the government; they are owned by private individuals who decide what to do and how to make it
• Their main aim is profit (most of the time)

PUBLIC SECTOR:

• Owned by the government; it controls the business and makes decisions
• Some goods/services are free of charge (example: health service)
• Money comes from the taxpayer not the user

Hence, if you want to classify a business based on ACTIVITY, you have primary, secondary, and tertiary. However, if you want to classify a business based on OWNERSHIP, you have private and public sector