Manufacturing

Also called: Manufacturing industry · Topic: Secondary Activities: Manufacturing and Industrial Location · NCERT: Class 10, Ch 6 "Manufacturing Industries"; Class 12, Ch 5 "Secondary Activities"

Meaning

Manufacturing is the turning of raw materials into finished goods of higher value, which are then sold in local or distant markets. It is the main part of secondary activities (work that adds value to natural resources). It matters because a country earns more by selling cloth or steel than by selling raw cotton or iron ore, and the work creates jobs for people leaving farming.

Explanation

How manufacturing adds value (cause → process → result)

• The word itself: Latin manu (hand) + factus (made), so it literally means "to make by hand".
• Today it mostly means goods made by machines.

• Goods made by hand still count as manufacturing.

• Value is added step by step:

• Cotton: cotton in the boll (the seed case of the plant) has little use → spun into yarn → woven into cloth. Each step raises its value.

• Iron ore: it cannot be used as it is dug out → smelted into steel → made into machines and tools.

• Value added (how the size of the sector is measured): the value of the finished output minus the value of the inputs used up, such as raw materials, fuel and services [2].

• International definition: the World Bank defines manufacturing as the "physical or chemical transformation of materials or components into new products". It falls under ISIC major division C [2].
• ISIC (International Standard Industrial Classification) is the UN's system for grouping economic activities.

Three common features of modern manufacturing

• Application of power: machines run on energy (coal, electricity, oil, gas) instead of human or animal muscle.
• Mass production of identical products: very large numbers of the same item are made, so each item costs less.
• Specialised labour in factories making standardised goods:
• each worker does one narrow task again and again
• the work happens in a factory (one fixed workplace with machines)

• goods are standardised, which means every piece has the same size, quality and design.

• Why these features came together:

• the Industrial Revolution began in Britain in the late 18th century and brought steam power
• factories grew, and with them came division of labour (splitting work into small tasks) and standard parts
• mass production then spread to Western Europe, the USA and later the rest of the world.

Where manufacturing sits in the secondary sector

Component	What it means	Examples
Manufacturing	Turning raw materials into finished goods of higher value	Textiles, iron and steel, cars, electronics
Processing	Treating a raw material so it can be used or lasts longer	Sugar from cane, rice milling, fish canning, oil refining
Construction (infrastructure)	Building fixed structures	Roads, bridges, dams, buildings, railways

• How wide it is: manufacturing covers everything from handicrafts and iron and steel to plastic toys, delicate computer components and space vehicles.

"Manufacturing" vs "industry" (NCERT box)

• Industry: a manufacturing unit that is located at one place and keeps accounts under a management system.
• The problem: people also say "industry" for work that is not factory work, such as the "tourism industry" and the "entertainment industry".
• NCERT's answer: use the longer term "manufacturing industry" because it is clearer.

Where it occurs

• Britain: the Industrial Revolution and the factory system began here in the late 18th century.
• Western Europe and the USA: power-driven mass production spread here next, and later to the rest of the world.
• India and other Third World (developing) countries: many producers still manufacture in the literal, hand-made sense.

• Examples: handloom weaving, pottery, metal crafts and carpet making in India's household and cottage sector (small units run at home or in small workshops).

• Least Developed Countries (LDCs):

• manufacturing value added (MVA) was 12.1% of GDP in 2015 and 14.0% in 2022 [5]
• MVA per person was only US$159 in 2022, against a world average of US$1,879 (constant 2015 prices) [5]

• progress is weakest in African LDCs [5].

• World: manufacturing is about 16% of world GDP (early 2020s) [2]. It gave 14.3% of world jobs in 2015 and 13.6% in 2021 [5].

• India:
• manufacturing is about 17% of GDP (Union Minister's statement, 2023), and the aim is to raise it to 25% [6]

• different data series put the share at about 13-17%.

• National Manufacturing Policy (NMP): a Government of India policy announced on 4 November 2011 [3].

• Targets: manufacturing at at least 25% of GDP by 2022 [3], and 100 million additional jobs by 2022 [3][4].
• Main tool: National Investment and Manufacturing Zones (NIMZs). These are large, integrated industrial townships with modern infrastructure, zoned land use, clean and energy-efficient technology, and social infrastructure such as housing and schools [3].
• Result: the 25% target was not met by 2022. The share stayed at about 17% [6].

Don't confuse with

• Processing: this treats a raw material so it can be used or kept longer (rice milling, fish canning). Manufacturing makes a new finished product (cloth, cars). Both are secondary activities.
• Primary activities: these take resources straight from nature (farming, mining, fishing, forestry) and are tied to where the resource is found. Manufacturing changes those raw materials and can move closer to markets, labour or power.
• "Tourism industry" / "entertainment industry": these are tertiary (service) activities, even though they are called "industries". Do not treat "industry" as the same thing as the secondary sector.
• Construction: this is also secondary, but it builds fixed structures (dams, roads). It does not make goods that are sold and moved to markets.

Prelims Hooks

• Secondary activities = manufacturing + processing + construction (infrastructure).
• "Manufacture" literally means "to make by hand" (Latin manu + factus).
• The three features of modern manufacturing are application of power, mass production of identical goods and specialised labour making standardised goods in factories.
• Trap: in NCERT's definition, an industry is a geographically located unit that keeps accounts under a management system. Tourism and entertainment "industries" are tertiary.
• Manufacturing = ISIC major division C. Value added = output value − intermediate inputs [2].
• NMP 2011: 25% of GDP and 100 million jobs, both by 2022, delivered through NIMZs [3][4]. SDG 9 aims to double the LDC manufacturing share of GDP by 2030, and that share was 14.0% in 2022 [5].

Mains Points

• Why manufacturing matters for development (GS-I/GS-III):
• it adds value to raw materials, so a country earns more than it would by exporting raw ore or cotton
• it gives jobs to people leaving agriculture and builds export strength

• this is why SDG 9 (industry, innovation and infrastructure) aims to double the LDC manufacturing share by 2030. The UN says progress is too slow, especially in African LDCs [5].

• An uneven world pattern (GS-I):

• developed regions moved to power-driven mass production after the Industrial Revolution
• much of the Third World still manufactures by hand

• the result is a wide gap in MVA per person: US$159 in LDCs against US$1,879 for the world in 2022 [5].

• India's manufacturing gap (GS-III):

• the share is stuck at about 17% of GDP, against the NMP goal of 25% [6][3]
• causes: weak infrastructure, complex rules, a shortage of skilled workers, and a jump from agriculture straight to services
• responses: NIMZs under NMP 2011, followed by Make in India and the PLI (Production Linked Incentive) schemes, which pay firms cash rewards for extra output.

Related concepts

• Secondary activities

Read more

• Secondary activities and the meaning of manufacturing