Welcome to our breakdown of O levels business studies unit 2 classification of businesses the business world can be divided into three key sectors primary secondary and tertiary The primary sector focuses on using natural resources to produce raw materials such as farming fishing forestry and mineral extraction next the secondary sector transforms these raw materials into manufactured or processed Goods think of Industries like car manufacturing ing construction or bread baking finally we have the tertiary sector which delivers services to Consumers and other businesses this includes Transportation banking retail insurance and even hairdressing now let's talk about the relative importance of these sectors we can measure their importance by looking at two criterias the percentage of workers employed in each sector and the value of output these sectors contribute to the total National economy different countries have varying distributions across these sectors in developing countries The primary sector dominates due to rural Lifestyles and low demand for services as Nations industrialize the secondary sector grows with more workers involved in manufacturing finally in developed countries the tertiary sector dominates as economies shift towards service-based Industries with higher demand for services so why does the importance of these sectors change over time time here are some key reasons depletion of Natural Resources reduces Reliance on The primary sector developed countries are losing manufacturing competitiveness to newly industrialized economies there's a phenomenon called de-industrialization in developed Nations as wealth grows consumers spend more on Services shifting demand from Goods to Services let's explore mixed economies which consist of both the private sector and the public sector the private sector includes businesses owned by individuals or groups aiming to make a profit with limited government interference the public sector on the other hand consists of government-owned organizations providing essential services like Health Care education public transport and utilities like water and electricity recent changes in mixed economies include privatization where governments sell public sector businesses to private ownership why privatize efficient profit-driven businesses focus on better cost control investment private businesses often have access to more Capital competition it encourages better quality and Innovation but there are drawbacks privatization may lead to unemployment as companies cut costs and often reduces focus on social objectives thanks for watching if you found this helpful make sure to like share and subscribe see you in the next video