Getting started
Date: 2015-10-07; view: 458.
UNIT 3 THE STRUCTURE OF INDUSTRY
Industry refers to the production of an economic good (either material or a service) within an economy. Industry classification systems used by the government commonly divide industry into the primary sector of industry (agriculture, mining, and raw material extraction), the secondary sector of industry (manufacturing), and the tertiary sector of industry (service production). Some governments identify the quarternary sector of industry which consists of intellectual services such as research and development. Market-based classification systems used in finance and market research commonly divide industries according to similar functions and markets and identify businesses producing related products. Industries can also be identified by product such as chemical industry, petroleum industry, automotive industry, etc.
Whichever classification system we use the firm is the key element of industry. Firms are the means through which society transforms less satisfying resources into more satisfying goods and services.
One outstanding feature of the world's industrial development during the last one hundred years has been the growth in the size of the firm. Concentration ratios suggest that the large firms dominate many industries. Yet small firms continue to exist.
In this unit we will be looking at why small firms continue to survive and why they are considered to be an essential feature of the industrial structure. Another point of our consideration will be the reasons why firms grow and the problems associated with large multinational corporations.
Discuss the following points.
1. Which sector do you intend to work or do you already work in?
2. Two hundred years ago the majority of the population of most countries earned their living from agriculture. Today, 2-3% of the people in industrialized countries are engaged in agriculture. Some economists talk about the decline of manufacturing. Is its decline inevitable?
3. Is manufacturing industry still important? Will services replace it?
4. In which sector of industry do you think the firm is most likely to grow fastest?
5. Which sector of industry can provide the most favorable economic environment for small firms, medium-sized firms, and large corporations?