Business Classification Overview

Introduction

• Focus on IGCC topic: Business Classification
• Key areas covered:
  • Primary, Secondary, Tertiary Sectors
  • Business classification in developed and developing economies
  • Differences between private and public sector businesses

Understanding Economy

• Definition of Economy:
  • Resources, riches, and wealth of a country
  • Importance of a balanced economy for businesses and government
  • Components:
    • Production, distribution, trade, consumption of goods and services

Business Sectors

1. Primary Sector

• Focus on raw resources
• Examples:
  • Gas, oil, diamonds, gold
  • Farming and fishing
• Characteristics:
  • Extraction of natural resources

2. Secondary Sector

• Processes raw materials into manufactured goods
• Also known as the production sector
• Examples:
  • Construction, refining, food processing, glass manufacturing, electrical and chemical industries
• Characteristics:
  • Takes primary sector outputs and turns them into usable goods
  • Example: Refining oil into petrol or diesel

3. Tertiary Sector

• Focus on providing services to consumers
• Examples:
  • Sales, repair services, banking, insurance, retail businesses
• Characteristics:
  • Enables customers to obtain and use finished goods

Interdependence of Sectors

• All three sectors depend on each other
• Example of Chain of Production:
  • Oil extraction (Primary) → Refining (Secondary) → Distribution at gas stations (Tertiary)

Types of Countries

Developed Countries

• Characteristics:
  • High standards in manufacturing
  • Improved living standards
  • High employment in the tertiary sector
  • Higher incomes and better healthcare

Developing Countries

• Characteristics:
  • Lower average incomes
  • High dependency ratio
  • Low levels of education
  • High population growth rates
  • More employment in the primary sector

Country Examples

• UK:
  • 74% Tertiary sector
  • 3% Primary sector
  • 23% Secondary sector
• Zimbabwe:
  • 40% Primary sector
  • 32% Secondary sector
  • 28% Tertiary sector

Industrialization and Deindustrialization

• Deindustrialization:
  • Shift from industrial jobs to service jobs
  • Decline in industrial activity
• Causes:
  • Cheaper imports from emerging countries
• Disadvantages:
  • Job losses in rural areas
  • Breakup of communities
• Advantages:
  • Less environmental pollution
  • Opportunity for new development (housing, wildlife habitats)

Private vs Public Sector Businesses

Private Sector

• Characteristics:
  • Produces goods and services based on consumer demand
  • Profit-driven

Public Sector

• Characteristics:
  • Decisions made by the government
  • Provides services to the public, often free of charge
  • Examples: Schools, courts

Conclusion

• Importance of understanding business classification for economic awareness
• Encouragement to like, share, and subscribe for more IGCC business resources.