Understanding the Secondary Sector: Types, Characteristics, and Global Impact

SECONDARY SECTOR

Industry Overview

The secondary sector encompasses all activities that transform raw materials into finished goods. This sector plays a crucial role in economic development, as industrialization drives growth and prosperity. Developed countries typically have well-established industrial networks.

Types of Industries

Industries can be categorized based on their level of technological advancement and the intended use of their products.

1. By Degree of Innovation:

• Mature Industries: These industries, such as textiles, steel, and shipbuilding, emerged during the 18th and 19th centuries and utilize established technologies.
• Advanced Industries: Industries like biotechnology, microelectronics, telecommunications, and robotics represent cutting-edge technologies and require significant research investment.

2. By Product Destination:

• Basic Industries: These industries process raw materials into semi-finished products (e.g., steel, aluminum, copper) that serve as inputs for other industries. Examples include steel, metallurgy, petrochemicals, and cement.
• Capital Goods Industries: These industries produce goods used in the production processes of other industries, such as machinery, engines, equipment, transportation materials, and building materials.
• Consumer Goods Industries: These industries manufacture products for direct consumer purchase, including automobiles, electronics, textiles, and food.

Characteristics of Modern Industry

Since the 1970s oil crisis, a new industrial production model known as the post-Fordist model has emerged, characterized by:

1. Technological Advancements and New Industries: The rise of information technology, biotechnology, telecommunications, and microelectronics has transformed the industrial landscape.
2. Consumer-Centric Production: Industries now cater to individual consumer preferences by offering a wide variety of product models.
3. Flexible and Automated Production: Modern industries employ flexible, automated, and highly specialized production systems.
4. Globalization and Emerging Economies: The globalization of the economy has integrated emerging countries into industrial development, fostering competition and innovation.

Multinationals and Competitiveness

Globalization has led to the growth of multinational corporations, which operate in multiple countries and leverage the advantages of each location. These companies are highly competitive, utilizing advanced technologies, investing heavily in research, and achieving economies of scale.

Factors Influencing Industrial Location

Several factors determine the location of industries, including:

• Access to innovation and information technology
• Transportation and communication infrastructure
• Availability of capital
• Proximity to markets
• Skilled workforce
• Access to raw materials
• Environmental considerations

Industrial Relocation (Offshoring)

Industrial relocation, or offshoring, involves transferring part or all of a company's production activities to another country, typically from a developed to a less developed nation. This trend has been prevalent since the 1990s due to:

1. Opening of emerging markets and internationalization
2. Advancements in information technology enabling real-time global communication
3. Improved transportation systems facilitating efficient movement of goods

Industrial relocation has significant implications for both the origin and destination countries, impacting employment, economic growth, and global trade patterns.