Secondary activities

Also called: Secondary sector · Topic: Secondary Activities: Manufacturing and Industrial Location · NCERT: Class 12, Ch 5 "Secondary Activities"

Meaning

Secondary activities are economic activities that add value to natural resources by changing raw materials into more useful and more valuable products, for example cotton into yarn and cloth, or iron ore into steel. They include manufacturing, processing and construction (infrastructure). They matter because a country earns more by selling finished goods than by selling raw ore or cotton. They also give jobs to people leaving farming.

Explanation

How value is added (raw material → product)

• Primary activities take resources straight from nature, such as farming, forestry, mining and fishing.
• Secondary activities take that output and change its form, so it is worth more.
• Cotton chain:
• cotton in the boll (the seed case of the plant) has little use
• it is spun into yarn, then woven into cloth

• each step raises its value.

• Iron ore chain:

• ore cannot be used as it is dug out
• it is smelted (heated in a furnace to separate the metal) into steel

• the steel is made into machines and tools.

• The same idea applies to goods from farms, forests, mines and the sea: sugarcane → sugar, timber → furniture and paper, bauxite → aluminium, fish → canned fish.

• Value added is how economists measure this. It is the value of the finished output minus the value of the inputs used up to make it (raw materials, fuel, services) [2].

The three parts of the secondary sector

Part	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

Manufacturing: the core of the sector

• Meaning: turning raw materials into finished goods of higher value that are sold in local or distant markets.
• Where the word comes from: Latin manu (hand) + factus (made), so it literally means "to make by hand".

• Today the word mostly means goods made by machines, but hand-made goods still count.

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

• Range: it runs from simple to very high-technology goods:
• handicrafts (made by hand at home or in small workshops)
• iron and steel (heavy, bulky goods)
• plastic toys (light consumer goods)
• delicate computer components (precision goods)
• space vehicles (the most advanced engineering).

Three features of modern manufacturing

• Application of power: machines run on coal, electricity, oil or 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)

• every piece is standardised, meaning it 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, along with division of labour and standard parts
• mass production then spread to Western Europe, the USA and later the rest of the world.

Where it occurs

• Britain: modern, power-driven manufacturing began here with the Industrial Revolution in the late 18th century. It later spread to Western Europe and the USA.
• World share: manufacturing is about 16% of world GDP (early 2020s). The World Bank tracks this as "manufacturing, value added (% of GDP)" [2].

• Global jobs: manufacturing gave 14.3% of world employment in 2015. This fell to 13.6% in 2021 [5].

• Third World / India: many developing producers still manufacture in the literal, hand-made sense. Examples are handloom weaving, pottery, metal crafts and carpet making in the household and cottage sector of countries like India.

• 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]

• the UN says progress is too slow, especially in African LDCs [5].

• India: manufacturing is about 17% of GDP (Union Minister's statement, 2023), and India wants to raise this to 25% [6]. Different data series put it at about 13–17%.

• National Manufacturing Policy (NMP), run by the Government of India, was announced on 4 November 2011 [3].
• It aimed for at least 25% of GDP from manufacturing by 2022 [3] and 100 million additional jobs by 2022 [3][4].
• Its main tool was National Investment and Manufacturing Zones (NIMZs). These are large, integrated industrial townships with modern infrastructure, land use by zoning, clean and energy-efficient technology, and social infrastructure [3].
• The 25% target was not met by 2022. The share stayed at about 17% [6].

Don't confuse with

• "Industry" in general use: "tourism industry" and "entertainment industry" are tertiary (service) activities, not secondary ones. NCERT prefers the clearer term "manufacturing industry".
• Primary activities: these take resources directly from nature and are tied to where the resource is found. Secondary activities process that output, add more value, and can move closer to markets, labour or power.
• Manufacturing vs secondary sector: manufacturing is only one part. The secondary sector also includes processing and construction (infrastructure).
• Value added vs gross output: gross output counts the full value of goods. Value added subtracts the inputs used up, so it shows the sector's real size [2].

Prelims Hooks

• Secondary activities = manufacturing + processing + construction (infrastructure).
• "Manufacture" comes from Latin manu + factus and means "to make by hand".
• The three features of modern manufacturing are application of power, mass production of identical products, and specialised labour making standardised goods in factories.
• NCERT defines an industry as a manufacturing unit at one place that keeps accounts under a management system. Trap: 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 (industry, innovation and infrastructure) aims to double LDC manufacturing share of GDP by 2030. The LDC share was 14.0% in 2022 [5].

Mains Points

• Why manufacturing matters for development (GS-I/GS-III):
• it adds value, so a country earns more than by exporting raw ore or cotton
• it creates jobs for people leaving agriculture

• it builds export strength, which is why SDG 9 targets doubling LDC manufacturing by 2030 [5].

• Uneven pattern across the world:

• 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, too few skilled workers, and a jump from agriculture straight to services
• responses: NIMZs under NMP 2011 [3], and later Make in India and the PLI (Production Linked Incentive) schemes, which give firms cash rewards for extra output.

Related concepts

• Manufacturing

Read more

• Secondary activities and the meaning of manufacturing