structure of industry
structure of industrythe productive activities of an ECONOMY classified according to broad groupings of activities by sector, or on an individual INDUSTRY basis (see STANDARD INDUSTRIAL CLASSIFICATION).
The three basic sectors of the economy are the primary sector (agriculture, minerals etc.), the industrial sector (manufacturing, construction, electricity etc.) and the service sector (banking, retailing etc.). The relative importance of these sectors tends to change as an economy matures: less developed countries are characterized by large primary sectors, whereas developed countries are characterized by large industrial and service sectors.
In the advanced countries, as Fig. 83 shows, there has been a relative decline in the industrial sector and a corresponding increase in the importance of the service sector. In the main this reflects a change in the pattern of final demand for goods and services over time, favouring services, and as such may be considered a natural development associated with a maturing economy. Despite this general tendency, deindustrialization, however, has aroused particular concern in the UK because it has been accompanied by slow growth in total output in the economy, high unemployment and balance of payments difficulties (i.e. the service sector has not been able to absorb all the slack created by industrial decline). The fact that deindustrialization has been more severe in the UK than elsewhere has been put down to mainly supply-side deficiencies: a low level of investment, higher supply costs and prices and lack of product sophistication and innovation has put the UK at a competitive disadvantage in INTERNATIONAL TRADE, resulting in imports taking up a rising share of the UK domestic market See IMPORT PENETRATION.
structure of industrythe productive activities undertaken in an economy classified according to broad groupings of activities by sector or, more narrowly, on an industry-to-industry basis. The three basic sectors of an economy are:
- the primary sector (raw materials and farming);
- the industrial or secondary sector (manufactured goods, construction, gas and electricity, etc.);
- the service sector (retailing, banking, tourism, etc.).
The relative importance of each of these sectors tends to change as the economy expands over time. For example, DEVELOPING COUNTRIES are characterized by very large primary sectors and small industrial and service sectors, whereas DEVELOPED COUNTRIES are characterized by small primary sectors and large industrial and service sectors. Fig. 177 shows that in the most advanced countries there has been a relative decline in the industrial sector and a corresponding increase in the importance of the service sector. See INDUSTRIALIZATION, DEINDUSTRIALIZATION, INDUSTRIAL CLASSIFICATIONS, ECONOMIC DEVELOPMENT.