Economic Activity, Sectors, and Factors

Economic Activity Fundamentals

Economic geography is the science that studies the aspects related to the economy. The phases of economic activity are:

• Production: Where goods and services are generated.
• Distribution: The distribution of these goods and services in establishments.
• Consumption: Consumers acquire these products to satisfy their needs.

Economic Sectors

Economic activities can be grouped into sectors:

• Primary Sector: Includes efforts to obtain food and raw materials (agriculture, livestock, fisheries).
• Secondary Sector: Comprises the activities that transform raw materials into processed products (e.g., food industry, chemical industry).
• Tertiary Sector: Includes activities that provide services to citizens (e.g., health, education, transport).

Key Economic Actors

The actors involved in economic activity are:

• Families: Involved in the economy through their work, producing and consuming goods and services.
• Companies: Involved in the economy by producing goods and services. Public enterprises are state-owned, and private enterprises are privately owned. There are micro-enterprises (less than 10 workers), small firms (under 50 employees), medium firms (up to 250 employees), and large corporations (more than 250 workers). Companies can be sole proprietorships or partnerships.
• States: Involved in the economy.

Factors of Production

Factors contributing to production include:

• Work: It is human activity that creates physical and intellectual goods and services.

  • Workers: Employees work for someone else. Autonomous workers work independently.
  • Contract Work: Indefinite (until retirement), Season (for a period of time).
  • Labor Unions: Help employees.

• Natural Resources: Products offered by nature.

  • Renewable: Not depleted with use.
  • Non-renewable: Resources that can be exhausted.

• Capital:

  • Physical Capital: Consisting of elements, materials, tools.
  • Human Capital: Referring to the training or qualifications of workers and their experience.
  • Financial Capital: Cash needed to found an enterprise.

• Technology:

  • Manual Procedure: Where human beings provide the strength and handle the tools.
  • Machining Process: The machine provides the force, but the worker handles it.
  • Automated Procedure: Machines provide the power and control the tools; workers manage these machines.

• Knowledge: A more prepared company benefits from knowledge.

Economic Growth Impact

If the economy grows, it benefits the country's economic growth.

Economic Globalization Process

Economic globalization is an economic process which aims to transform the global economy so that all countries are connected economically. This is achieved by increasing international trade, allowing countries to freely buy and sell products. Globalization tends towards the creation of a single global market.