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UNIT 3
ECONOMIC ACTIVITIES
Structure
3.1 Introduction Expected Learning Outcomes 3.2 Classification 3.3 Types of Economic Activities Primary Activities Secondary Activities Quaternary Activities
Quinary Activities 3.4 Summary 3.5 Terminal Questions 3.6 Answers 3.7 References and Further Reading
Tertiary Activities
3.1 INTRODUCTION
In the previous units, you have studied and learnt about the scope and approaches along with concepts in economic geography. All of you know about the meaning of economic activities formally or informally in one way or the other. For many of you, it simply refers to finance, markets or trade and jobs etc. Economic activities comprise a whole set of livelihood related activities practiced over the space and time in myriad forms. Study of evolutionary history gives us an idea regarding its changing nature, form and scale across the World, entailing an element of spatial transformation. It began from subsistence (primarily associated with agriculture and allied activities), to barter to slavery, feudalism, capitalism and socialism and commercial forms of economy characterized by multi-faceted forms and specializations with the passage of time, albeit with regional differentiation and areal variations.
At present, nearly 8 billion people inhabit the planet Earth, being spread into different continents and countries. However, it is not evenly distributed and shows striking regional variations evident with pockets of extremely higher proportion of population residing in Asian geographical regions like China and India on the one spectrum and sparsely populated geographical regions of four Scandinavian countries and many others elsewhere across the World. With few exceptions, in extremely less developed pockets of sub-Saharan Africa, Asia and Latin America, much of the segment of population have already been integrated into globally interconnected economic systems. It
reflects the interdependence of human societies on each other for sharing and exchange of various commodities, knowledge systems and technologies etc. It is not a difficult task for you to distinguish the diverse forms of economic activities of any place. As a student of geography, you will deal with the spatio-temporal dimensions of economic activities. This will make you learn about the relationships that exists between resources, production and consumption patterns.
In this unit, we will focus on the classification of economic activities in detail dealt in Section 3.2. And, Section 3.3 is devoted to the brief study on types of economic activities. We believe that study of this Unit may enable you to understand the very basis of economic activities that represents the lifeline of the human beings to eke out their living and livelihood. This unit will provide you a brief glimpse of geographically holistic understanding of the entire range of economic activities carried out by the human population in varied forms. You will be able to decipher and see the associations and interrelationships between the utilization of resources and people that paves the way for the economic set-up of an individual, firm and region etc.
Furthermore, you will study in detail about the primary sector, secondary sector along with service sector spread across the ten units of Blocks 3, 4 and 5 of this same Course. It is designed to provide you a holistic and comprehensive understanding of varied sectors of economy or economic activities.
Expected Learning Outcomes
After studying this unit, you should be able to: describe the classification of economic activities; and explain the various types of economic activities.
3.2 CLASSIFICATION
Before discussing the classification, we will briefly discuss about the historical background of economic activities. We will begin with the evolution of economic activities which talks about the origin of any activity or phenomenon e.g., the origin of the universe, religion, ethnicity and language, formation of rural and urban areas and many others. Here, we are dealing with the economic activities that provide the platform for the survival and sustenance of human beings. You can think of it in terms of a profession which your adult siblings, parents, relatives or friends are doing in order to live a decent standard of life. It will make you think about the professions taken up by your near and dear ones.
Since time immemorial, the economic activities were driven or characterized by the subsistence levels of the human societies. The exchange of goods and services used to be very archaic in nature. Initially, it started with the exchange in kind, for example, exchange of various food grains between one region to another region which we know as ‘barter trade’ to meet the dietary and clothing needs of each other. Gradually, it acquired the shape of feudal economies to that of industrial revolution and recently took the shape of multinational and transnational (MNC’s and TNC’s), corporations. With the
- Exchange: It refers to the addition of time and place utility. Basically, it deals with the sale of goods in the market. It occurs at two levels in the sector of economy as under:
a) Trade: It includes both wholesale and retail trade.
b) Transportation: It includes both passenger and freight.
- Consumption: It refers to the utilization of goods and services to satisfy the human wants and needs. It is of two types as under:
a) Consumer goods: It includes food, shelter, clothing etc., being utilized in terms of direct satisfaction of human requirements.
b) Producer goods: This refers to the consumption in terms of further production of goods. It is meant for indirect satisfaction. Producer goods are also known as intermediate goods. Such kinds of goods are used for further processing and manufacturing. Few common examples could be salt, glass, wood, steel, and many others like silver and gold etc.
However, a difference can be seen in the types of economic activities of a particular nation, which could be the result of economic stage through which it is passing or already has passed/crossed.
Economic activity refers to the activity of manufacturing, purchasing and selling of goods and services etc. We may say that any activity which entails production, distribution, or consumption of products or services can be termed as ‘economic activities. Besides, any kind of spatial activity which involves trade for monetary reasons or the exchange of products or services fall under the ambit of economic activities. All sorts of economic activities revolve around three inter-related aspects namely a) Business; b) Profession and c) Employment. Basically, economic activities can be classified into three major forms. These are primary, secondary and tertiary activities. Tertiary activity can further be classified into two types as quaternary and quinary activities. We will describe each one of these in the next Section under types of economic activities.
Fig. 3.1: Schematic diagram showing classification of economic activities.
You will agree that it is indeed a very important task to highlight the importance of economic activities. Can you imagine the importance of any of the economic activity which you are familiar with? If yes, please write down the same on the margins of your study material. We are mentioning few key areas of importance below which will be of relevance to you as a student of geography and holder of graduate Degree. These may include source of livelihood, accumulation of capital, exchange of goods and services, interdependencies between regions/nations/geographic realms, flow of Information and Communication Technologies (ICT’s), exchange of ideas, knowhow, capacity building measures along with philanthropy etc.
Economic activities are concerned with the distribution, size, shape and production of various goods and services in geographical settings.
In this section, we will make you learn about the processes which these varied set of activities undergo. All kinds of economic activities can be arranged into the ‘sectors of economy’. It basically means the categorization of various types of economic activities on the basis of their character, scale, area of operation and the application of technological inputs. Can you think of any such economic sectors which you know or have seen either in your immediate neighbourhood, district, state or nation?
It could range from a small village farm, handicrafts units and cement, soap, pharmaceutical factories and technology parks and multinational corporations etc. This is just a suggestive list. In real world, you may encounter dozen of such cases operating relatively in a random manner. In our country, the Ministry of labour and employment, GOI has classified 3600 civilian
Classification of Economic Activities
Production
- Primary
- Secondary
- Tertiary
- Quaternary
- Quinary
Exchange
- Transportation
- Distribution services
Consumption
- Includes utilisation of various goods and services by human society.
3.3.1 Primary Economic Activities
We believe that you already have an idea about the word primary e.g., primary school, primary friends, primary colours and primary sources of data etc. Similarly in case of economic activities, it is concerned with an activity employed in the collection or to make available the raw material in its primary state extracted from the nature or biophysical environment for further processing. It forms a part of the economy related to the primary sectors of economy or we can say primary industries. It includes agriculture and its allied activities. Broadly, these are known as agriculture, ranching, hunting and gathering, fishing, forestry, mining and quarrying along with many further sub- specialized categories of economic activities. You must have seen or may be a practitioner of agriculture and its allied activities with your family. It may particularly apply to those who are residing in the rural set-up or simply in villages. The same holds true in case of many of the developing nations of the world. If so, can you list out the salient features which you know about the same on the margins of your booklet. Agriculture and its allied activities encompass a long list of activities, each differing with their characteristic geographic regions. For example, mountainous regions will have different set of activities as compared to that of plains and coastal regions. In essence, both activities include growing of food and feed along with livestock rearing forms the part of primary economic activities.
Primary economic activity or industry refers to any of the industries that provides products or goods which has not been altered or processed into useable format. In totality, these form the part of the primary sector of an economy. The proportion of workforce engaged in primary economic activities along with other four economic activities also indicate the stages of economic development being achieved by a particular country or nation. A large proportion of workforce in much of the developing world or countries are still engaged in the primary economic activities, primarily into agriculture and its allied activities, the way many European countries were around more than three hundred years before present. There may be tremendous gaps the way agriculture is practiced in the developed and developing parts of the world. In former case, it is completely supported with modern technologies such as hybrid seeds, genetically engineered crops, sound irrigation techniques, besides mechanized farming. However, in later case, it may still be lagging behind in these techniques due to various bottlenecks, albeit with regional variations. Besides national level gaps, there may be tremendous regional level gaps as far as employment in this sector is concerned. For example, national capital region and almost all the state and Union Territory capital cities of India has much lower proportion of population employed in primary economic activities than its most of the rural hinterlands due to obvious reasons of prevalence of other sectors of economy.
As mentioned in the beginning, you will learn a great deal about the primary economic activities or primary sector/industry as elaboratively discussed with examples in 04 Units of Block 3 of this same course.
3.3.2 Secondary Economic Activities
Secondary industry refers to an industry that processes the products or material, we can say raw products into a useable product by doing value
addition. It is devoted to the manufacturing industries. The raw material is obtained from the primary sector. Since primary sector doesn’t provide the products or goods in finished form to make the human lives easy and comfortable. Therefore, it is not a difficult task for you to visualize that we require a kind of industry which can do so in a better way. You can say that this industry is directly concerned with alteration of the nature of primary articles into finished goods meant for direct consumption by the vast categories of consumers in the society. It may include many items like manufactured goods, construction work, and electric power production to name a few for your understanding. If you happen to know some of these secondary activities, then you can list out these in the margins of your SLMs. This may give you a sense of idea to categorize various assorted set of economic activities, especially in developing parts of the World.
Manufacturing activity/industry entails a process of diffusion of technology from its cradlelands or origin points with widespread regional differentiations to rest of the World. In turn, the process of industrialization also necessitates the growth of cities or more appropriately urban ways of life resulting into urbanization, whereby the character of rural hinterlands begins changing into towns and cities of various sizes. Geography of secondary economic activities or manufacturing is far from simple as it is characterized by complexities at many scales and levels. These can be seen into multiple branches, each branch may be characterized by diverse forms of structure and organization, combination of technologies, demand and supply, labour, capital, technology and market factor etc. Today, the conditions to choose the appropriate location to set up an industry significantly differ from earlier times. It is also influenced by the government policies and incentives (especially keeping in mind the defense and security issues), which may play a decisive role to decide the location of an industry, besides other important input and output factors. A kind of industry or group of industries which a particular nation or geographical region has is indicative of its levels of economic development (seen in terms of per capita income, technological know-how and advancements and external linkages with rest of the World) etc.
Basically, it refers to the part of the economy concerned with manufacturing and processing. For example, production of iron and steel (from various group of minerals), automobiles, readymade garments, furniture, electronic appliances (like computers, television and mobiles etc.), production of milk and associated dairy products from pastoral farming, production of textile from cotton farming, production of furniture from lumbering activities etc. It encompasses the entire range of manufacturing, processing and construction works that comes under the ambit of secondary sector. Some of the prominent activities are metalworks and smelting, production of automobiles, production of textiles, a huge variety of chemical and engineering industries, aerospace manufacturing, energy utilities, breweries and bottlers, construction and shipbuilding etc. Nowadays, many niche forms of manufacturing activities have also sprung up to meet different needs of the society that may be economically viable and environmentally sustainable in the longer-run, prominently since the era of liberalization, privatization and globalization (LPG), post 1990. Besides, it is also aimed towards substantial reducing in the consumption of fossil fuels, air, water and soil pollution along with waste to mitigate and minimize the damage to the physical environment.
sector mainly concentrated in bigger towns and cities. It is primarily oriented towards serving the community at large as well as individuals at micro level.
Basically, tertiary sector deals with the supply of services to its consumers and associated business enterprises, e.g., retail, sales, transportation and restaurants. On an average, tertiary economic activity employs less than one fourth proportion of workforce in developing countries, whereas it employs nearly three-fourth proportion of workforce in developed countries. The good growth of tertiary sector is an indication of the competition in international arena.
3.3.4 Quaternary Economic Activities
It refers to the kind of economic activity which is concerned with information. It involves the acquisition, manipulation and transmission of information. Quaternary economic activities may include law, finance, education and research etc.
In this sector, the economic activities of the tertiary sector are taken into account. These may be concerned with the research, assemblage, processing and transmission of information. It may also include the management of some more industrial sectors as discussed in preceding sections. Such services are generally delivered into special kinds of environments. Earlier, quaternary sector industries used to be found mostly in advanced or developed countries, mainly around nodal centres of industrial development, for example, near London and Thames valley. Now, it is getting dispersed to the other centers especially in the capital cities and their satellite towns (e.g., New Delhi and Gurugram, Bangalore and elsewhere etc.). You can say that it is purely a knowledge-based activity. Some of the key characteristics may include the knowledge of computing systems, expertise in ICT and scientific research etc. The proportion of workforce remains relatively lesser in developing countries whereas in developed countries, it accounts for a sizeable proportion of the workforce in quaternary sector. The geographical region or a nation or simply a place experiencing the constant development or good growth of this activity may further strengthen the array of quinary economic activities.
3.3.5 Quinary Economic Activities
It refers to a part of the economic services, a sub-division of tertiary activities. Basically, it deals with the generation, re-arrangement and explanation of both existing and new ideas along with interpretation of huge datasets and utilization as well as evaluation of emerging frontiers of technologies. Quintessentially, it is concerned with the information and specialised expertise/skills in order to provide a handsome or cutting-edge service to the intended clients or community of stakeholders or simply its users. It may include a host of professional like scientists, academicians, government officials, business executives, financial and law related consultancy services and many others etc. In other words, we can say that quinary activities are being executed by the apex level policy and decision-makers in an economic structure of a geographical region or at a district, state, national and international scales. Usually, the higher proportion of working population engaged in this activity can be seen more prominently in the developed parts
as opposed to developing parts of the world. You can easily guess that the nations or advanced nations which employ more people onto this activity will be more and more developed. This sector has witnessed rapid progress since last forty years seen in the growth of knowledge-based industries catering to the demand of various stakeholders in the society. Many of the science and technologically enabled quinary services related to quinary economic activities will also be dealt in Unit 17 of the same course.
SAQ 2
a) State the main features of primary economic activities by citing local examples of your choice. b) What are quinary economic activities?
3.4 SUMMARY
In this unit, you have learnt the following:
You have learnt about the classification of economic activities.
You have also learnt the importance of economic activities that is very crucial for the decent standards and better quality of life for the humankind.
You have further learnt the different types of economic activities that make the very backbone of economic relationships with space, time and societies.
This unit has enabled you to see the various categories of economic activities right from the primitive up to the emergence of ICT’s enabled avocations to transform the nature and character of economy, society and nation alike.
3.5 TERMINAL QUESTIONS
- Briefly describe the classification of economic activities.
- Elaborate upon the secondary economic activities.
- Highlight the salient features of quaternary economic activities.
3.6 ANSWERS
Short Answer Questions (SAQ)
- It deals with the various sectors of economy, including primary, secondary, tertiary, quaternary and quinary etc.
- (a) Main features of primary activities deal with the engagement in the production of raw material or natural resources for further value addition, such as mining and quarrying, lumbering, fishing and agriculture etc.
