Components of Economy Essay Example for Free

Components of Economy EssayHuman activities which generate income are know as economic activities. All the economic activities are classified into three categories viz. base, secondary and 3rd. Activities that are directly associated with environment are known as primary activities as they refer to utilization of immanent resources like land, water, vegetation, minerals etc. When primary goods are used to produce virtually other articles or commodities, any manually or by machines, then this activity is known as secondary activity. For both primary and secondary activities, we require a substantial measuring stick of support services which are known as tertiary activities. 1.Primary ActivitiesPeople engaged in primary activities are called red collar workers due to exterior nature of their work. Agriculture, fishing, live-stock rearing, mining are some of the examples of primary activities. In most of the developing countries including India, primary activities still resu lt substantial earnings especially in rural areas. These activities are important as they provide livelihood for the human beings and are backbone of industry as most of the raw materials are provided by them. Many countries in Africa and Asia and some parts of Europe and the USA are heavily dependent on this sector for economic development.2.Secondary ActivitiesThese activities add value to natural resources by transforming raw materials into valuable and useful products. Secondary activities, thus, are concerned with manufacturing, processing and construction (infrastructure) industries. Thus, there is some mutual dependency between primary and secondary activities. Secondary activities, thus require human skills, technology, funds, mechanization, electricity or other form of power.3.Tertiary ActivitiesTertiary activities are related to the service sector. All those activities which provide support to primary and secondary activities and link the producers and consumers are called as tertiary activities. The main difference between secondary and tertiary activities is that the expertise provided by tertiary or service sectors relies more heavily on specialized skills, experience and knowledge of workers rather than on the production techniques, machinery and factory processes. Transportation, trade, banking, communication, insurance are some of the examples of such services. This sector is growing at a phenomenal rate in India and provides attractive employment opportunities.