Classification of businesses

Primary sector of industry extract and uses the natural resources of earth to produce raw materials used by other businesses.

eg: woodcutter

Secondary sector of industry manufactures goods using raw materials provided by the primary sector

eg: furniture maker

Tertiary sector of industry provides services to consumers and the other sectors of industry

eg: retailer

De-industrialisation occurs when there is a decline in the importance of the secondary, manufacturing sector of industry in a country

Tertiary sector in the UK now employs over 75% of all workers, many lost jobs s factories closed and have found it difficult to obtain work in the service industries.

Reasons why there are chances in the relative importance of the three sectors over time:

• Sources of primary product become depleted

• Most developed economies are losing competitiveness in manufacturing to newly industrialised countries

• As a country's total wealth increase and living standards rise, consumer tends to spend their income on service ( travel ) than on manufacture products

Mixed economy has both private and public sector

Private sector:

• business not own by the government

• where business own by private individuals and runs the business ventures

• main aim is to make profit

Public sector:

• government own and control the business

• aim is to provide essential public goods and service in order to increase the welfare of the citizens

• funded by citizens tax

Privatisation: when government sell the public sector businesses ( owned and control by the government ) to private sector businesses

• This is because private business are more efficient than public sector businesses since there main objective is to earn profit.

• Also private sector invested more capital into the business

However

• private sector might make workers unemployed as they need to cut off cost

• They are less likely to focus on social objectives