Primary Sector

Forecasts suggest that a cold winter is approaching, so you and your friends decide to see if you can't make a few extra quid by selling off some firewood. You go into the nearby forest, find a recently-dead tree, and chop it up into neat little logs. You spread the word: £5 a bundle. Before you know it, the wood is gone.

Without realizing it, you've just participated in the primary sector of the economy in your own little way. This sector is concerned with natural resources and provides the foundation for the secondary and tertiary economic sectors.

Primary Sector Definition

Geographers and economists divide economies into different 'sectors' based on the economic activity performed. The primary sector is the most fundamental, the sector upon which all other economic sectors rely and build.

The word 'primary' in 'primary sector' refers to the idea that countries seeking to industrialise must first establish their primary sector.

Primary Sector Examples

What do we actually mean when we say the primary sector is concerned with the extraction of natural resources?

Natural resources or raw goods are items we can find in nature. This includes raw minerals, crude oil, lumber, sunlight, and even water. Natural resources also include agricultural products, like produce and dairy, though we may think of agriculture itself as more of an 'artificial' practice.

Fig. 1 - Lumber is a natural resource

We can contrast natural resources with artificial resources, which are natural resources modified for use by humans. A plastic bag is not naturally occurring, but it is made from materials originally found in nature. The primary sector is not concerned with the creation of artificial resources (more on that later).

The harvesting of natural resources for commercial use is the primary sector in a nutshell. Primary sector examples, therefore, include farming, fishing, hunting, mining, logging, and damming.

Primary Sector, Secondary Sector, and Tertiary Sector

The secondary sector is the economic sector that revolves around manufacturing. This is the sector that takes natural resources collected via primary sector activity and turns them into artificial resources. Secondary sector activity includes construction, textile fabrication, oil distillation, water filtration, and so forth.

The tertiary sector revolves around the service industry and retail sales. This sector involves putting artificial resources (or, in some cases, raw materials from the primary sector) to use. Tertiary sector activity includes transportation, the hospitality industry, restaurants, medical and dental services, garbage collection, and banking.

Many geographers now recognize two additional sectors: the quaternary sector and the quinary sector. The quaternary sector revolves around technology, knowledge, and entertainment and includes things like academic research and network engineering. StudySmarter is part of the quaternary sector! The quinary sector is more or less the 'leftovers' that don't quite fit in the other categories, like charity work.

Importance of Primary Sector

The secondary and tertiary sectors build upon the activity conducted in the primary sector. Essentially, the primary sector is foundational to virtually all economic activity in the secondary and tertiary sectors.

Fig. 2 - Oil extraction in progress

You'll note that while the quaternary sector and quinary sector depend upon the resources generated in the primary and secondary sectors, they don't quite build upon their foundation and, in many ways, bypass the tertiary sector entirely. However, societies typically cannot invest in the quaternary and quinary sectors until/unless the tertiary, secondary, and/or primary sectors are generating a substantial amount of discretionary income.

Primary Sector Development

Talking about economics in terms of sectors implies a relationship with socioeconomic development. The operating assumption of most international organisations, including the United Nations and the World Bank, is that socioeconomic development is good and will lead to greater overall human welfare and health.

For several centuries, the most straightforward path toward economic development has been industrialisation, meaning a country must enlarge its economic capabilities by expanding its industry (secondary sector) and international trading potential. The income generated from these activities should theoretically improve the lives of people, whether that's individual spending power in the form of salaried income or government taxes reinvested into public social services. Economic development, therefore, enables social development through increased education, literacy, the ability to purchase or acquire food, and better access to medical services. Ideally, in the long term, industrialisation should lead to the elimination or drastic reduction of involuntary poverty in a society.

Once a country begins to pursue socioeconomic development via industrialisation, they essentially join the "world system," a global trading network.

To industrialise, a country must first have natural resources that it can feed into its secondary sector. In this regard, countries with an abundance of highly-desirable natural resources and the widespread ability to collect those resources are at a natural advantage. And that's where the primary sector's role in development comes in. We are currently seeing this in countries like Nigeria.

If the primary sector cannot provide a foundation for the secondary sector, industrialisation (and socioeconomic development) will stagnate. When a country has generated enough money from the international trade of natural resources through primary sector activity, it can then re-invest that money into the secondary sector, which should theoretically generate more income, which can then be reinvested in the tertiary sector and increased quality of life.

A country with most of its economy in the primary sector is considered "least developed," while countries mostly invested in the secondary sector are "developing", and countries mostly invested in the tertiary sector (and beyond) are "developed." No country is ever invested 100% in just one sector—even the most impoverished, least developed country will have some sort of manufacturing or service capabilities, and the wealthiest developed country will still have some amount invested in raw resource extraction and manufacturing.

Most least-developed countries will start in the primary sector by default because the same activities that provide a base for secondary sector activity are those humans have been doing for thousands of years to stay alive: farming, hunting, fishing, collecting wood. Industrialising just requires expanding the scope and scale of the primary sector activities that are already being practised.

Fig. 3 - Commercial fishing is a primary sector activity

There are, of course, a few caveats to this entire discussion:

• Some countries do not have access to desirable natural resources with which to establish a primary sector. Countries in this position that wish to proceed with industrialisation must trade/buy from other countries to access natural resources (ex: Belgium imports raw materials for itself from trade partners), or somehow bypass the primary sector (ex: Singapore marketed itself as a great destination for foreign manufacturing).

• Industrialisation in general (and primary sector activity specifically) has caused severe harm to the natural environment. The amount of primary sector activity necessary to support a stable secondary sector has led to widespread deforestation, large-scale industrial agriculture, overfishing, and pollution via oil spills. Many of these activities are direct causes of modern climate change.

• Developed nations may benefit so much from trade with least-developed nations that they may actively attempt to prevent their socioeconomic development (see our explanation on World Systems Theory).

• Many ethnic nations and small communities (like the Maasai, San, and Awá) have resisted industrialisation almost entirely in favour of a traditional lifestyle.