The economic sectors – all about the topic

The steps of a production can be divided into different sections in the economy.

These are called the economic sectors. The main distinction is made between the primary sector, the secondary sector and the tertiary sector.

In this article we explain everything about the economic sectors. The subject is dealt with in geography.

If you are interested in a specific topic, simply click on the relevant term and you will be taken directly to the article.

What are the three economic sectors?

In business, the labor market is divided into different sections, the so-called sectors. The word «sector» derives from the Latin word «sector», which literally means «something that cuts». A sector is therefore a section or an area.

Classically, a distinction is first made between three different sectors: dem primary sectorto the Secondary Sector and the tertiary sector.

These three sectors are used to classify the activities of companies.

The primary sector – the primary production

The primary sector includes the original production. One also speaks of primary production or the agricultural sector. The raw materials for further processing are therefore mined in this area. The still unprocessed goods are procured directly from nature, for example in agriculture, fishing or forestry. This sector is very labor intensive and physically demanding.

In poorer developing countries, the proportion of people working in the primary sector is often higher than in industrialized countries like Germany.

There is an inverse relationship between the primary sector and a country’s level of development. This means that the fewer employees a country has in the primary sector, the more highly developed it is. This explains why the primary sector is relatively large in developing countries, but rather small in industrialized nations.

The Secondary Sector – the industrial sector

The secondary sector, also called the industrial sector, deals with the further processing of raw materials from the primary sector. As the name suggests, the focus here is on industry. This area also includes crafts, energy and water supply and the construction industry. In addition to raw materials, the secondary sector also requires machines and is therefore material and capital-intensive. That means a lot of money is needed.

The tertiary sector – the service sector

The tertiary sector can also be called the service sector. In this area, the goods from the primary and secondary sectors are distributed and consumed. The sector includes all services provided by companies, the state or other public institutions. Professions that fall into the tertiary sector are, for example, doctors, hairdressers or teachers. A lot of workers are needed for this area, so it is labour-intensive.

The tertiarization of the economy – the change in Germany

In many countries and economies, including Germany, a change from an agricultural society to an industrial society and a service society could be observed in the last 150 years. A large part of the population used to work in the primary sector, for example as farmers, fishermen or foresters.

With industrialization, the resulting new machines and industries and the increased demand of the population for manufactured goods, it happened that more people began to work in the secondary sector. Occupations that can be assigned to the industrial sector are, for example, bricklayers, carpenters or carpenters.

In most industrialized countries, the majority of the population now work in the service sector, for example in commerce, in banks, in insurance or in transport.

The tertiarization of the economy is not only noticeable through the increasing number of people working in the respective sectors. The importance of the tertiary sector can also be seen from the value added, measured as gross domestic product (GDP) (link) or gross value added.

The gross domestic product indicates the total value of all goods, goods and services after deducting the intermediate consumption that were produced in a country during a year. Today, the tertiary sector in Germany, as well as in many other countries, contributes the largest part to the GDP.

The Quaternary Sector – the information sector

Sometimes a quaternary sector is distinguished in addition to the three economic sectors. This is also called the information sector. It includes parts of the tertiary sector that make particularly high intellectual demands and require a pronounced willingness to assume responsibility.

However, the definition varies somewhat depending on the point of view. Generally speaking, the Quaternary sector includes services whose business is based on data, knowledge and information. This area deals with information, its collection and processing.

This usually includes jobs in research and development, in the IT industry, in high technology, in communications technology or in tax, legal and business consulting. This sector is also growing in highly developed countries.

The Quintary Sector

One rarely speaks of a quintary sector that includes the waste management industry. These include sewage treatment plants, refuse collection, recycling plants and scrap yards. Depending on the definition, leisure and tourism, as well as education and health care are also assigned to the quintessential sector. However, the definitions of the quaternary and quintal sectors often overlap.

The economic sectors – everything important at a glance!

  • The economy is mainly divided into three different sectors: the primary sector, the secondary sector and the tertiary sector
  • In highly developed countries there has been a shift from the primary sector through the secondary sector to the tertiary sector. This development is called tertiarization.
  • In developing countries there is a comparatively large primary sector.
  • Sometimes the economy is additionally divided into the quaternary sector and the quintary sector.
  • The quaternary sector deals with information, its collection and processing, which is why it is also called the information sector.
  • Rarely does one speak of the quintary sector, which includes the waste management industry.