Industry (economics)
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Industry is the production of goods or related services within an economy.[1] The major source of revenue of a group or company is the indicator of its relevant industry.[2] When a large group has multiple sources of revenue generation, it is considered to be working in different industries. Manufacturing industry became a key sector of production and labour in European and North American countries during the Industrial Revolution, upsetting previous mercantile and feudal economies. This occurred through many successive rapid advances in technology, such as the production of steel and coal.
Following the Industrial Revolution, possibly a third of the world's economic output is derived that is from manufacturing industries. Many developed countries and many developing/semi-developed countries (People's Republic of China, India etc.) depend significantly on manufacturing industry. Industries, the countries they reside in, and the economies of those countries are interlinked in a complex web of interdependence.
Classification
Industries can be classified in a variety of ways. At the top level, industry is often classified according to the three-sector theory into sectors: primary or extractive, secondary or manufacturing, and tertiary or services. Some authors add quaternary (knowledge) or even quinary (culture and research) sectors. Over time, the fraction of a society's industry within each sector changes.
Below the economic sectors there are many other more detailed industry classifications. These classification systems commonly divide industries according to similar functions and markets and identify businesses producing related products.
Industries can also be identified by product, such as: construction industry, chemical industry, petroleum industry, automotive industry, electronic industry, meatpacking industry, hospitality industry, food industry, fish industry, software industry, paper industry, entertainment industry, semiconductor industry, cultural industry, and poverty industry.
Market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used in finance and market research.
ISIC
The International Standard Industrial Classification (ISIC) of all economic activities is the most complete and systematic industrial classification made by the United Nations Statistics Division.[3]
ISIC is a standard classification of economic activities arranged so that entities can be classified according to the activity they carry out. The categories of ISIC at the most detailed level (classes) are delineated according to what is, in most countries, the customary combination of activities described in statistical units, considering the relative importance of the activities included in these classes.
While ISIC Rev.4 continues to use criteria such as input, output and use of the products produced, more emphasis has been given to the character of the production process in defining and delineating ISIC classes.
Industrial development
The industrial revolution led to the development of factories for large-scale production, with consequent changes in society.[4] Originally the factories were steam-powered, but later transitioned to electricity once an electrical grid was developed. The mechanized assembly line was introduced to assemble parts in a repeatable fashion, with individual workers performing specific steps during the process. This led to significant increases in efficiency, lowering the cost of the end process. Later automation was increasingly used to replace human operators. This process has accelerated with the development of the computer and the robot.
Deindustrialisation
Historically certain manufacturing industries have gone into a decline due to various economic factors, including the development of replacement technology or the loss of competitive advantage. An example of the former is the decline in carriage manufacturing when the automobile was mass-produced.
A recent trend has been the migration of prosperous, industrialized nations toward a post-industrial society. This is manifested by an increase in the service sector at the expense of manufacturing, and the development of an information-based economy, the so-called informational revolution. In a post-industrial society, manufacturing is relocated to economically more favourable locations through a process of off-shoring.
The difficulty for people looking to measure manufacturing industries outputs and economic effect is finding a measurement which is stable historically. Traditionally, success has been measured in the number of jobs created. The lowering of employee numbers in the manufacturing sector has been assumed to be caused by a decline in the competitiveness of the sector although much has been caused by the introduction of the lean manufacturing process. Eventually, this will lead to competing product lines being managed by one or two people, as is already the case in the cigarette manufacturing industry.
Related to this change is the upgrading of the quality of the product being manufactured. While it is easy to produce a low tech, low skill product, the ability to manufacture high quality products is limited to companies with a highly skilled staff.
Society
An industrial society can be defined in many ways. Today, industry is an important part of most societies and nations. A government must have some kind of industrial policy, regulating industrial placement, industrial pollution, financing and industrial labor.
Industrial labour
In an industrial society, industry employs a major part of the population. This occurs typically in the manufacturing sector. A labour union is an organization of workers who have banded together to achieve common goals in key areas such as wages, hours, and other working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labour contracts with employers. This movement first rose among industrial workers.
War
The industrial revolution changed warfare, with mass-produced weaponry and supplies, machine-powered transportation, mobilization, the total war concept and weapons of mass destruction. Early instances of industrial warfare were the Crimean War and the American Civil War, but its full potential showed during the world wars. See also military-industrial complex, arms industry, military industry and modern warfare.
List of countries by industrial output
| Economy | Countries by industrial output in 2015 (billions in USD)
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(01)  China
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(—)  European Union
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(02)  United States
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(03)  Japan
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(04)  Germany
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(05)  United Kingdom
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(06)  India
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(07)  South Korea
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(08)  Brazil
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(09)  Canada
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(10)  France
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(11)  Mexico
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(12)  Italy
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(13)  Russia
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(14)  Indonesia
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(15)  Saudi Arabia
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(16)  Australia
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(17)  Spain
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(18)  United Arab Emirates
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(19)  Turkey
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(20)  Switzerland
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The twenty largest countries by industrial output in 2015, according to the IMF and CIA World Factbook. | |||||||||
See also
- North American Industry Classification System
- North American Product Classification System
- Standard Industrial Classification
- Industry information
- Industrial revolution
- Outline of industry
References
- ^ Industry | Define Industry at Dictionary.com
- ^ "'Definition of Industry' Investopedia".
- ^ ISIC (Rev.4)
- ^ More, Charles (2000). "Understanding the Industrial Revolution". London: Routledge.
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Bibliography
- Krahn, Harvey J., and Graham S. Lowe. Work, Industry, and Canadian Society. Second ed. Scarborough, Ont.: Nelson Canada, 1993. xii, 430 p. ISBN 0-17-603540-0
External links
The dictionary definition of industry at Wiktionary
Media related to Industries at Wikimedia Commons
Quotations related to industry at Wikiquote
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