ZIMSEC O Level Business Studies Notes: The Three Sectors of the Economy
- There are three levels of economic activity:
- Primary Level
- Secondary Level
- Tertiary Level
- All those businesses which are related with extraction of raw material from the earth such as mining, fishing, farming, and logging
- Such activities are also known as Primary Sector businesses.
- There is very little addition of value.
- The Primary Sector makes up the largest part of Zimbabwe’s economy.
- Zimbabwe’s economy is based on Agriculture which is part of the primary sector.
- The primary sector provides essential raw materials to other sectors of the economy
- For example fuel for Transport and Raw materials for manufacturing.
- It provides food that is used to feed the personnel in each sector.
- It also makes its own contribution to the Gross Domestic Product thus leading to an increase in the standards of living.
- Some raw materials are exported to other countries thus earning essential foreign currency for Zimbabwe.
- All businesses which manufacture and process the raw materials which can be used by the end consumers are known as Secondary Sector businesses.
- These include building, construction, compute assembly, shoes factories, textile factories etc.
- Examples of businesses in this industry include Astra Paints, Lobels Bread etc
- The primary sector adds value to processed raw materials
- It makes them usable by the end consumers or by other industries for example copper wires are used in manufacturing electronic and electrical equipment.
- Finished goods can be exported to other countries thus earning foreign currency.
- The Secondary industry increases Zimbabwe’s GDP and leads to an increase in the standards of living.
- Exporting processed goods instead o raw materials minimises the possibility of imbalances in trade and thus lead to the development of Zimbabwe.
- businesses which provide services and assist both the primary and secondary sector businesses can be classified as Tertiary sector businesses.
- These include transportation, insurance, hospitals, educational institutes, showrooms etc
- Examples include the University of Zimbabwe, Midlands State University etc.
- The tertiary industry provides essential services to the other sectors thus leading to development.
- Without Transport for examples goods would not be transported from the source to destination markets.
- Warehouses provide storage and other services to the other sectors of the economy.
- Advertising enables sellers to communicate with buyers.
- Banking provides essential financial services.
- Insurance provides essential functions such as indemnifying customers and businesses against incidental losses.
- Communication services enable various entities within the economy to communicate with one another. Studies have shown a correlation between broadband (part of communication) usage and the development of a country (GDP).
- Other services such as Hotels also play a crucial service by bringing in foreign currency into the country through for example tourism.
To access more topics go to the O Level Business Studies Notes Page.