Hello and welcome to Sense Business YouTube channel. In today's video we'll be covering an IGCC topic, Business Classification. We'll go into details of the primary, secondary, treasury sectors and we'll give examples of how businesses are classified.
We'll talk about classification of business in developed and developing economies. about the difference between private and public sector businesses. So let's get started and enjoy this lesson.
The first thing we're going to talk about is economy. So for us to classify businesses we need to understand economy. So what is an economy?
To understand the classification of business we need to understand what economy means. In simple and easy words it means the resources, riches and wealth. of a country. The bigger the economy, the better it is for the country.
The economy may rise or fall at any time, so it is very important that businesses and the government maintain a balanced economy. When we say economy, we mean the production, distribution, trade, consumption of goods and services of a country. It is all... things a company produce and we as customers or business sell or buy and every country in the world business are classified into three different sectors whether you are in India United States United Kingdom United Emirates wherever you are all businesses are classified into three different sectors and they are primary secondary in tertiary. So let's break each down so we understand them better.
Primary is where businesses deal with raw resources of our earth. It is the extraction of natural resources such as gas, oil, diamond and gold. Farming and fishing is also in the primary sector. So does that make sense?
Primary is anything that is dealt with hand in a liquid. requires extraction from the earth. The next one is secondary.
This is where businesses take the raw materials produced by the primary sector, so the first sector. So they take things that are produced from the first sector and process them into manufactured goods and products. This sector is sometimes known as production sector. Examples of secondary sector are construction industry, refining, food industry, glass industry, electrical industry, chemical industry and energy industry.
So secondary makes it better. So the primary sector gets something out of the earth and the secondary sector turns that good into something we can use. So for example the primary will extract oil and the secondary will refine it and make it So it is usable and we can get our cars going with it so that is the difference between one deals with the extraction and all the more in the production and simple words the primary sector Extracts raw resources. Let's say oil and the secondary sector refines this oil so we can use it for different purposes for example petrol or diesel another example would be fishing the primary sector will bring fish out of the ocean to sell it to secondary businesses who will package the fish into 1 kg 2 kg or 5 kg to sell it onwards to us the customer or another business tertiary is the final sector of a business as you may have guessed this sector focuses on providing service to consumers it enables customers to obtain and use the finished goods for example tertiary are sales people repair services banking and insurance your local retail businesses are all in the tertiary sector here is an overall examples for the three sectors that will help you remember so any business that is involved with extracting resources from our earth is primary turning the extracted resources into usable goods is a secondary sector and providing service is a tertiary sector and that is all you need to know about the three sectors All three sectors depend on each other. So you need to remember that all these three sectors will somehow depend on each other.
So we have a company that extracts oil from earth. That's primary. A company that refines the oil so it's usable is secondary. A company that brings the refined oil to a near gas station near you is tertiary. This is also known as chain of production.
We'll talk about chain of production in another video. I have prepared 10 questions for you So question one is bank question. Two is gas extraction question.
Three is insurance Four is oil five is retail business six is car repair business Seven is bakery eight is building houses and nine is fishing ten is hospitals you need to identify which sector they belong to. I'll give you five seconds so that you can write them down so you can pause the video and write them down. Very good I'm sure you've guessed them all right if you're not sure if you want to see the Answers for these questions, the link will be in the description below so you can go into my website and view your answers as I don't want to put them here because it might take too long time and the video will become boring. Let's talk about types of countries now.
There's two different types. There are developed countries and developing countries. Developed countries are those where manufacturing is imported or conducted with high standards. They have improved living standards, reduced poverty, wide range of economic and social choices, and increased freedom self-esteem.
High number of people are employed in the tertiary sector, and there is high levels of productivity and investment. People in these economies have higher incomes and good standards of health care. On the other hand, developing countries have low incomes on average.
Generally, people in developing countries are poorer than people in developed countries. Low levels of savings due to low income, low life expectancy, but high rates of population growth. In developing countries, the birth rate exceeds death rates and there is a high dependency ratio. Low levels of education and care. reduce productivity and poor housing and high number of workers are employed in primary sector and manufacturing is recently established and growing here is an image that shows a map of different countries and whether they are developed or in developing or in the process of developing different economies countries are classified by size of different sectors of business activity and not by a sector of economy this means whichever business activity a country relies on the most will place them in an economy sector every country in the world is not same each focuses on different sector for example as you can see in the example UK or United Kingdom has seventy 4% for territory what this means is that nearly all businesses in this country are services such as bank insurance companies and hospitals and only 3% are extracting raw materials from the earth so this may be gas oil or coal and 23% turns the raw resources into usable goods which may possibly be imported from another country this is a developed country On the other hand we have Zimbabwe which has 40% for primary sector that means that a little less than half of all the businesses in this country is involved in physical work.
Extracting resources from earth such as gold, diamond and oil. Manufacturing is 32% and treasury is 48%. As most Possibly all resources extracted and manufactured are sent or exported to countries like UK, USA which result in high treasury sector in these countries. Zimbabwe is a developing country or an example of a developing country.
This tells us that in developed countries nearly all people are employed in the treasury sector. Now then, let's talk about industrialization and deindustrialization. Why it happens? So, deindustrialization is when a country shifts from lots of jobs in industrial primary and secondary sectors jobs to more jobs in the treasury sector.
So from extraction and production to a service, the decline in industrial activity in a region or an economy. Deindustrialisation in the UK happened because it became cheaper to import materials and goods from emerging countries like China, over producing and exporting them so the disadvantage of disadvantages of de-instra de-industrialization if i can get the word correctly pronounced is that the loss of jobs in rural area the breakup of rural communities such as people move to towns and cities to find work the need to clean up old industrial sites dem demolishing old buildings filling in old sets removing toxic waste advantages is that less environmental pollution old industrial buildings that can be made into tourist attractions the opportunity to remove ugly industrial buildings from the landscape the chance to return land to farming or forestry or to create new wildlife habit the opportunity to use brownfield sites for new housing there are private and public sector businesses so private sector businesses are businesses that produce goods and services that consumer wants business decides the best way of producing their goods and on private sector making profit is their main target for most of businesses that are in private sector on the other hand public sector is all decision of what and who to produce are taken by the government so the government is in charge of the public sector businesses they provide services to the public rather than making profit some services are free of charge these are all under public services you and so for example schools and government services of courts and things like that most of them are are in public sector whereas private sector are things like a local shop thank you for watching this video and please make sure that you like share and subscribe to this channel so you can get more resources on igcc business topics