An Overview of Industries

In business, an industry is any branch of any economy which creates a closely knit group of products, raw materials, or service, that when put together collectively create a productive and profitable sector of the overall economy. For instance, one could compare the wood processing industry to the airline industry. The two industries share many elements in their core business but are distinct entities by themselves. It is this sort of unifying theme that helps industries form into an identifiable “industry,” which can help isolate them from the rest of the economic picture.

In economics, industries are distinguished primarily by how they relate to consumer demand. An example of this is seen when comparing the production process of a consumer good, such as a television, to that of a manufacturer who might make shoes or cars. The manufacturing of consumer goods necessarily involves some form of inputs from the consumer; however, the final output or consumer goods will always be done away with at the end of the process. This final output, which may be anything from a television to a car to a computer to clothing, is the result of the manufacturing process. Industries then, are those that transform raw materials into the final product produced in a timely manner.

An industry can also be broken down into two main categories: primary industries, which are those which derive most of their revenue from primary production processes, such as factories and mining operations; and secondary industries, which are those which derive most of their revenue from secondary production processes, such as retailing and leasing. A primary industry can be further categorized into three main subsets: primary producers, which are the producers of raw materials e.g. steel producers; primary products, which are the objects used in the manufacturing process e.g. automobiles and houses; and secondary producers, which are those whose products are resold or traded by means of a distribution system e.g. stores and malls.