Industry and Its Classification: Business Studies Class 11


What is Industry?

Business activities may be classified into two broad categories — Industry and Commerce. In this post we will discuss about Industry and its classification.

Industry is concerned with the production or processing of goods and materials. It refers to economic activities, which are connected with conversion of resources into useful goods.


  • involves mechanical appliances and technical skills; and
  • includes activities relating to producing or processing of goods as well as breeding and raising of animals.

The term industry is also used to mean groups of firms producing similar or related goods. For example, cotton textile industry refers to all manufacturing units producing textile goods from cotton. Certain services like banking and insurance are also referred to as industry.

Industry and its classification into three broad categories: Primary, Secondary and Tertiary

Industry and Its Classification

Let us discuss the classification of Industry in detail

(a) Primary industries

Connected with the extraction and production of natural resources and reproduction and development of living organisms, plants etc. Primary Industries are subdivided into:

  1. Extractive industries: These industries extract or draw out products from natural sources. They supply some basic raw materials that are mostly products of the soil. Products of these industries are usually transformed into many other useful goods by manufacturing industries. Important extractive industries include farming, mining, lumbering, hunting and fishing operations.
  2. Genetic industries: These industries remain engaged in breeding plants and animals for their use in further reproduction. Examples seeds and nursery companies, cattle breeding farms, poultry farms, and fish hatchery etc.

(b) Secondary industries

These industries process materials produced by primary industries to produce goods for final consumption or for further processing by other industrial units.

For example, the mining of an iron ore is a primary industry, but manufacturing of steel is a secondary industry. Secondary industries may be further divided as follows:

  • Manufacturing industries: Engaged in producing goods through processing of raw materials and thus creating form utilities. Manufacturing industries may be further divided into four categories on the basis of method of operation for production
  1. Analytical industry which analyses and separates different elements from the same materials, as in the case of oil refinery.
  2. Synthetical industry which combines various ingredients into a new product, as in the case of cement, cosmetics etc.
  3. Processing industry which involves successive stages for manufacturing finished products, as in the case of sugar and paper.
  4. Assembling industry which assembles different component parts to make a new product, as in the case of television, car, computer, etc.
  • Construction industries : These industries are involved in the construction of buildings, dams, bridges, roads as well as tunnels and canals. Engineering and architectural skills are an important part in construction industries.

(c) Tertiary industries

These industries provide service facilities and support services to primary and secondary industries. They may also be considered as a part of Commerce as they assist the activity of trade. Included in this category are transport, banking, insurance, warehousing, communication, packaging and advertising.

Hope this small write-up gave you an idea about Industry and its classification. This topic is covered in Chapter 1 of Business Studies of Class 11 of NCERT Syllabus.


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