Secondary Sector

Chances are, you've come across a construction site. Maybe it was a single worker replacing a rotted wooden beam – or a large team of workers building an entirely new apartment complex, blocking off roads and sidewalks and working day and night, rain or shine, to meet building deadlines.

Regardless of the scope, you've encountered the sector of the economy that is most indicative of expanding socioeconomic development: the secondary sector. Allow us to explain.

Secondary Sector Definition Geography

Economists and geographers often divide economic activity into different sectors based on each activity's attributes. This is sometimes referred to as the three-sector model. The secondary sector is the sector associated with "making things."

The secondary sector transforms natural resources, raw materials collected from nature, into artificial resources, human-created objects for use by people. The secondary sector may also be called 'the manufacturing sector' or just 'the manufacturing industry.'

Types of Secondary Sector

Secondary sector activities include, but are not limited to:

• Construction

• Fabrication

• Assembly

• Distillation

• Filtration/Purification

Fig. 1 - Construction on a new apartment complex in Seattle, Washington, USA

Outside of construction (using raw and fabricated materials to create buildings), probably the most quintessential occupation of the secondary sector is factory work. Raw materials are delivered to a factory, where employees and machinery process those materials into something not-so-raw. In some cases, those artificial resources are then sent to another factory where they join together with other artificial resources to create a fully-assembled tool or retail product.

The scope of the secondary sector is larger than you might imagine. Turning raw grains into a sugary breakfast cereal is a secondary sector activity. Turning crude oil into petrol for your car is a secondary sector activity. Virtually all activities that involve the creation of processed or fabricated goods are part of the secondary sector.

Secondary Sector of the Economy

Did you notice the starting and ending points of the example in the section above? The secondary sector's role in an economy can only be fully understood by juxtaposing it against other economic sectors.

The primary sector of the economy revolves around the collection of natural resources. These are activities that humanity has been doing for thousands of years: farming, fishing, hunting, logging, mining. Modern economic activity has expanded the scope and scale of these activities.

The primary sector is what provides a foundation for the secondary sector. Once materials from the primary sector arrive in the secondary sector, they can be reshaped into items we use in everyday life.

The tertiary sector is the economic sector that revolves around making use of the materials that were manufactured in the secondary sector. This includes retail (selling the manufactured items) and service (using the manufactured items as tools to enable the function of transportation, restaurants, medical professions, and so on).

The primary, secondary, and tertiary sectors comprise the three-sector model we mentioned earlier, though many economic geographers now also recognize the existence of the quaternary sector (technology, information, and entertainment) and the quinary sector (charity work, some public services, high-level decision-making).

Secondary Sector Examples

If the primary sector provides the foundation and the tertiary sector makes use of the finished product, then the secondary sector is the element that connects the two sectors together. Let's revisit the example we used above again, but this time label which activity belongs to each sector:

As you can see, the secondary sector is the bridge!

Secondary Sector Development

The landscapes so ubiquitous to secondary sector activity, like a skyline dominated by factories or endlessly expanding urban construction, are very likely the same images that come to mind when we use words like 'industrialisation' or 'urbanisation.' And that's no coincidence: the expansion of the secondary sector is a good indication that a country is, indeed, industrializing. In fact, the word 'industrialisation' refers to an expansion of industry, that is, manufacturing capability: industrialisation and the secondary sector go hand-in-hand.

Fig. 2 - Smoke billowing from factories is a ubiquitous image of secondary sector development

Why might a country choose to industrialise? The main factor is socioeconomic development. In other words, the idea is that expanding industry will improve a national economy by bringing in more income (economic development), which will ultimately improve the welfare of citizens (social development), whether that income is realised as personal spending power or social programs funded by taxes.

This idea that industrialisation, as difficult and costly as it is, will ultimately lead to greater well-being has been borne out in many highly industrialised countries, which tend to have higher rates of literacy, higher life expectancy, and better medical services than countries that are less industrialised.

Least Developed, Developing, and Developed Countries

Geographers and economists place countries in one of three socioeconomic development categories. On the one hand, least developed countries typically have undergone relatively little industrialisation, and their economies are dominated by the primary sector. On the other hand, developing countries are in the process of industrializing, and their economies are dominated by the secondary sector. As a country continues to industrialise (and develop), the secondary sector gives way to the tertiary sector, as the income and artificial resources generated by the secondary sector are what enable the tertiary sector to exist, leading to the 'developed' category.

The Secondary Sector and the World Economy

To take full advantage of the secondary sector, a country must join the 'world system,' i.e., the interconnected network of global trade. In this way, countries can link their secondary sector to other economies in a few different ways:

• Trading locally produced secondary sector products internationally

• Inviting foreign countries to use their land and labour pool for their own secondary sector needs

• Inviting foreign labourers to work as secondary sector employees

International Trade

The first option is probably the most straightforward. Suppose Country Teal, for example, has expanded its primary sector to create a foundation for its secondary sector. Businesses in Country Teal then mass produce highly desirable secondary sector goods, which are then exported all over the world. Income from these exports provides employees salaried wages, and taxes on the secondary sector's successful businesses allow Country Teal's government to invest in social and public services like education, roadways, police departments, firefighting, and healthcare.

Foreign Businesses, Domestic Labour

The second option involves inviting foreign businesses to establish a secondary sector. This might happen for one of two reasons: either the country has very limited natural resources, so can neither expand its primary sector nor establish a secondary sector (think Singapore); or the country has quite a few natural resources and a sufficient labour pool to support secondary sector activity but lacks the infrastructure or investment needed to get things started (think Mexico, Vietnam).

In both of those situations, foreign companies may open local factories. Foreign companies can access cheap labour, allowing them to increase profit margins when the manufactured goods are then sold back to consumers in developed countries. Meanwhile, the labourers can benefit from a higher salary relative to their fellow citizens, and their government can benefit from the taxation, creating, in ideal situations, a symbiotic relationship.

As you can imagine, the ideal does not always play out, as many foreign businesses are looking for ways to cut costs as much as possible. It has even been speculated that developed countries may actively try to stall developing countries' socioeconomic development as long as possible so they can continue to take advantage of cheap labour and cheap manufactured goods (see our explanation on World Systems Theory). Singapore, however, was able to industrialise extremely rapidly using this method and is now one of the most developed countries in the world.

Fig. 3 - Singapore, now highly urbanised, was able to industrialise rapidly by opening its secondary sector to foreign businesses

Domestic Businesses, Foreign Labour

The third option, inviting foreign labour to meet secondary sector needs, is very rarely a tactic developing nations adopt. Instead, you are more likely to find this arrangement in developed countries where most of the workforce has moved to the tertiary sector, leaving many of the remaining manufacturing jobs (and even many of the remaining primary sector jobs) vacant. However, India and China, both deep within the process of industrialisation, are experiencing labour shortages because global demand for their secondary services and products now outweighs what their working populations can produce. Migrant workers in China often come from Vietnam and Mongolia, while migrant workers in India often come from Bangladesh.