exploitnatural resources. Mining, forestry, fishing, and agriculture are the main
commercial activities in the primary sector. All of these activities are extractive,
meaning that they withdraw economic value from the land or water of the Earth.
The primary sector is crucial to the economy because it produces materials for
the secondary sector and also provides basic necessities such as food. Before the
industrial andagricultural revolutionsof the 18th and 19th centuries, the primary
sector was the largest sector in most economies, both in terms of employment as
well as for volume and value of production. In most modernized economies the
primary sector accounts for only a small percentage of employment, but this is
not universally true. In the United States, for example, the primary sector accounts
for about two percent of total employment, and the figure is similar to that in most
countries of the European Union. On the other hand, China, a country with a large
economy and significant industrial capacity, still has approximately 50 percent of
its workforce employed just in agricultural production.
The secondary sector consists of those economic activities that utilize the prod-
ucts and materials generated in the primary sector to make more complex kinds of
goods. This sector is frequently characterized in a broad sense as the manufactur-
ing sector, but this label includes several processes that do not typically result in a
manufactured product, such as electricalpower generation, smelting of metallic
ores, sawmilling, refining, and processing of some foods. The economic processes
in this sector are multilayered and complex, as many of the items or substances
created in one secondary activity are often used in a subsequent activity to produce
yet another, more sophisticated good. For example, crude petroleum, a commodity
obtained through primary sector activity (mining) can be manufactured into syn-
thetic rubber as part of the secondary sector. The rubber obtained via this pro-
cedure may then be used to make tires, which in turn are incorporated into a yet
more complex and expensive good, an automobile. Parts of the secondary sector
that utilize large quantities of bulky raw materials from the primary sector, such
as iron and steel manufacture or petrochemical refining, sometimes referred to as
heavy industry, frequently locate in close proximity to the sources of their primary
inputs, or at break-of-bulk points. The early iron and steel industry in Great Brit-
ain, for example, was situated adjacent to deposits of iron ore and coking coal,
the two most important ingredients in steel manufacture. Thislocationlowered
the transportation costs of the ore and coal. In some industriesagglomerationis
common, which leads to lower costs and greater efficiency.
Most economic activity in so-called post-industrial economies takes place in
the tertiary, or service sector. In the United States’ economy, the largest in the
world, approximately 80 percent of the labor force is engaged in service activities.
Just as in the secondary sector, a large range of activities falls within this sector.
Retail stores, personal services like barbers, tanning salons, restaurants (in the
Sectors of the Economy 303