The term 'industry' refers to a group of organisations that produce and supply products, services and any sources of income. In an economic context, industries are classified as primary, secondary and tertiary. As well as this, secondary industries are divided into heavy and light.
The term primary industry refers to those businesses which focus on the extraction and collection of natural resources, as well as activities such as farming and fishing. Companies which belong to this sector are also involved in the process of developing products from natural resources.
The primary industry plays an important role in the economic development of many countries. As well as this, in developed nations, it has become technologically advanced as money is invested in this sector. Therefore, developed countries require less workforce in this industry and invest more workforce in the secondary and tertiary sectors.
Although the primary industry is usually at the base of economic development, it has also problems such as monopoly power and volatility.
Firstly, one of the main problem associated with the primary industries is that wealth is unequally distributed among the businesses. Indeed, in this sector, there are usually firms that gain monopoly power over the production of materials and pay workers with a small part of the whole revenue. Secondly, primary products are volatile both in price and output. Indeed, prices of primary materials are subject to large swings and if the prices of a material fall, countries which are basing their economy on those resources will see a fall in their revenue, causing issues.
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