What Is A Sector?
A sector is a group of several different but related businesses based on the economic activity they perform in a country.
A sector is one of the areas into which the economic activity of a country is divided. It comprises various businesses that produce goods and services that are related.
Economic activities in any country can be divided into sectors. By making this division, economists infer whether the overall economy is growing, what economic activities are flourishing, and what areas of a country need intervention.
Sectors are used to categorize businesses into various groups based on their economic activity. There are four main sectors an economy may be divided into:
1. Primary: This is sometimes called the “extraction sector”. It is concerned with the extraction of raw materials and acts as a foundation for all other businesses. Examples of companies that belong here are businesses involved in Farming, Fishing, Mining, etc.
2. Secondary: This takes raw materials from the primary and converts them into finished products. Another name for this is the “manufacturing sector.” Examples of businesses that are part of this are Oil refineries, food production companies, automakers.
3. Tertiary: This often deals with the production of services, otherwise known as the “service sector.” It covers a wide range of activities, including but not limited to administration, transport, finance, and health.
4. Quaternary: This is an extension of the tertiary. It is also known as the “knowledge sector” and comprises economic activities that are intellectual or knowledge-based. Examples are: consultation, entertainment, designing, education, etc
Economic activities are simply activities that produce, trade, or distribute goods and services in a country. It is a group where various economic activities belong.
Rio Tinto is a metals and mining company based in the United Kingdom. Since the company mines natural resources such as aluminum, copper, gold, and iron ore, it belongs to the primary sector.« Back to Glossary Index