Stages of Production
Production is the creation of utility to satisfy human wants, and is complete only when the good reaches the final consumer.
- Primary stage: the extraction of raw materials — farming, forestry, mining, and fishing.
- Secondary stage: the transformation of primary products into finished goods, through construction industries (assembling finished products into new forms, e.g. building a house) and manufacturing industries (transforming raw materials into finished products, e.g. food processing).
- Tertiary stage: distributive industries and services, such as wholesalers, retailers, transporters, teachers, lawyers, and accountants.
Some economists identify a fourth, quaternary sector, concerned with research and development.
Industrial Occupations
Activities involved in transforming raw materials into finished goods, divided into three groups:
- Extractive industry: produces food items and raw materials for manufacturing industries, e.g. fishery, poultry, farming.
- Manufacturing industry: transforms raw materials from extractive industries into finished products, e.g. leather and rubber into bags and shoes.
- Constructive industry: assembles components from both extractive and manufacturing industries into an organised whole, e.g. buildings, roads, bridges.
Commercial Occupations
Involved in the buying of goods and services that directly assist trade (the “aids to trade” — advertisement, banking, transport, warehousing, insurance). Direct services provide personal services directly to consumers without an intermediary, e.g. teaching, tailoring, acting.
Summary Classification
| Industry | Commerce | Services |
|---|---|---|
| Primary (extraction: fishing, farming) and Secondary (manufacturing, construction) | Trade (home: wholesale/retail; foreign: import/export/entrepot) and Aids to trade (transport, banking, insurance) | Direct services and indirect services |
