#businessstudies

Stages of economic activity

As you read this post you are probably sitting at a desk or table. Most tables are

made of wood. How many different types of businesses might have been involved

in converting the wood into a finished table ready to be sold to a final consumer?

What stages of production has the wood passed through to arrive at the finished

table?

The diagram below shows the most likely stages in the production and sale of a

wooden table.

You will notice that there are three main stages from the cutting down of the

timber to the sale of the completed table. These stages are typical of nearly all

production and they are called the levels of economic – or business – activity.

Stage 1 is called the primary stage of production. This stage involves the

Earth’s natural resources. Activities in the primary sector of industry include

farming, fishing, forestry and the extraction of natural materials, such as oil and

copper ore.

Stage 2 is called the secondary stage of production. This stage involves taking the materials and resources provided by the primary sector and converting them into manufactured or processed goods. Activities in the secondary sector of industry include building and construction, aircraft and car manufacturing, computer assembly, bread baking.

Stage 3 is called the tertiary stage of production. This stage involves providing

services to both consumers and other businesses. Activities in the tertiary sector

of industry include transport, banking, retail, insurance, hotels and hairdressing.