2.2 Primary, secondary and tertiary industries

Economic and management sciences

Grade 6

From tree to tin can

Module 6

Primary, secondary and tertiary industries

1. What is primary industry?

These are industries that have to do with the exploitation of raw materials found in nature.

1. What is secondary industry?

This involves factories that manufacture goods, i.e. industries that are involved with the conversion of raw materials into goods.

1. What is tertiary industry?

These are the businesses that render the services to supply the products to the consumer or transport the products to the consumer (marketing and distribution).

Assignment 1

Arrange the following industries under the appropriate headings:

banks , a canning factory , a wheat farm , a supermarket , a hair salon , a sweet factory , a fishery , an estate agent , a fruit farm , a cattle farm , pine plantations , a wholesaler , the police , the municipality , hospitals , schools .

[LO 2.1]

Because there are three types of industry, it is possible for us to say that a product goes through three stages of production. All products undergo these three stages of production, which are

This is called the PRODUCTION CHAIN . The price increases at each link in the chain. When one of your parents therefore buys a can of preserved peaches, she or he is paying for the work of the farmer, the manufacturer, the transporter, the wholesaler and the shop owner.

Assignment 2

Look at the following flow chart that describes how tart apples are produced. Identify the primary, secondary and tertiary stages of production.

[LO 2.1]

Assignment 3: group project

Use pictures from old magazines and newspapers to make a poster showing the differences between the primary, secondary and tertiary stages of production. You must therefore paste pictures of products representing the different stages.

[LO 2.1]

Assignment 4

Ask your educator to arrange a class visit to a local industry. After the visit draw a flow chart with labels indicating the PRODUCTION LINE through which the raw materials pass to eventually become the final product.

[LO 2.1]

The cost of production

To manufacture goods, the producer needs materials, labour and capital. Manufacturing costs money, because each of the inputs must be paid for. Two main costs are involved, namely direct and indirect costs .

What are direct costs ? These are the materials and labour needed to manufacture things. These direct costs vary according to the amount of items produced

What are indirect costs ? These are expenses such as advertising and telephone accounts that cannot be directly linked to the production process. Some of these indirect costs are fixed amounts which are paid monthly, e.g. rent, interest and salaries. Others differ from month to month and depend on the amount of water and electricity that is used, as well as the amount of telephone calls that are made.