What Are Economic Sectors

The economic sectors correspond to the division of the economic activity of a State or territory, and includes all the stages of exploration of natural resources, up to industrialization, preparation for consumption, distribution, and commercialization of goods and services.

The classification of economic sectors is useful to understand how all areas of production and trade are related, as well as to understand the impact of a State’s economic policies on specific sectors of the economy.

The economy of a nation has been classified into the following economic sectors:

  • Primary sector.
  • Secondary sector.
  • Third sector.
  • Quaternary sector.
  • quinary sector.

In turn, each of these areas is subdivided into economic branches or sub-sectors, which make up all the links in the production chain.

Primary sector

The primary sector includes all activities to obtain natural resources. This is linked to the agricultural, fishing, mining and forestry sub-sectors.

In this sector of the economy, primary products are obtained through extraction or production for the supply of material, necessary for the secondary and tertiary sectors.

See also Primary sector.

Secondary sector

The secondary sector of the economy corresponds to the transformation of raw materials into industrialized products with high added value, into finished or semi-finished products, or into machinery and industrial tools.

In this sector, industrial activities, construction, food processing, naval and aeronautical industry, etc. stand out.

You may be interested:  Meaning of Fascism

See also Secondary sector.

Third sector

The tertiary sector is defined as the sector of commerce and provision of services, and it is where the distribution and commercialization of tangible and intangible goods takes place, such as the offer of services provided to companies or individuals. It stands out in this sector, commercial, banking, tourist services, etc.

See also Tertiary sector.

Quaternary sector

The quaternary sector can be considered as a subdivision of the tertiary sector, and covers all those areas in which knowledge is capitalized as a good, but it is impossible to mechanize. It includes intellectual activities related to research, development of science and technology projects, innovation and information. For example: consulting, the information industry, etc.

quinary sector

Like the previous one, the quinary sector can be considered a subdivision of the tertiary sector. It covers those economic activities related to the creation, organization and interpretation of information and guidance in decision-making applying new technologies.

The quinary sector also includes those economic activities that are not for profit in themselves, but are aimed at solving regulatory needs, that is, mandatory, such as public education services, citizen security (police, civil protection and firefighters) , public health and culture. It also includes all types of economic activity recorded by the action of different NGOs. It also includes domestic activity that cannot be formally measured.

Economic and social sectors

The economic and social sectors also intervene in the economy of a country, state or territory, and are classified into three sectors:

Public sector

The public sector includes all state organizations, and is made up of the three main powers of the state; executive, legislative and judicial power. This sector also includes state companies.

You may be interested:  Civic and Ethical Formation

Private sector

The private sector encompasses all domestic private companies. That is, they are companies that carry out the economic activities of a country but are managed by a natural person. They often belong to the tertiary sector (provision of goods and services).

external sector

This sector includes foreign private companies that intervene in the national economy, as is the case of transnational companies.

However, between these three sectors it is possible to obtain a JVdue to the combination of public and private capital, whether the latter is national or foreign.

See also Innovation.