Secondary activities are economic activities that transform raw materials obtained from primary activities into finished or semi-finished goods. They include manufacturing, processing, construction and power generation. While primary activities add value through extraction from nature, secondary activities add value through the processing of materials. Manufacturing is the most important secondary activity, and it refers to the transformation of raw materials into more valuable products, either through machines, tools or human skill.
Secondary activities are carried out at different scales, from the tiny workshop of a craftsperson to the giant industrial complex employing lakhs of workers. The growth of manufacturing is closely linked with the level of industrialisation and urbanisation of a country. Developing countries generally have a smaller share of workers in secondary activities, while developed countries have well-developed manufacturing sectors producing a wide range of consumer and capital goods.
Industries can be classified on the basis of size, raw materials, ownership and the nature of output. On the basis of size, industries are classified into cottage industries, small-scale industries and large-scale industries. Cottage industries are conducted at home by family members using local raw materials and simple tools, such as pottery, basket weaving and handloom work. Small-scale industries use a small amount of capital and hired labour, while large-scale industries require huge capital, many workers and heavy machinery.
On the basis of raw materials, industries are classified as agro-based (cotton textiles, sugar, food processing), mineral-based (iron and steel, aluminium, cement), forest-based (paper, furniture) and marine-based (fish processing). On the basis of ownership, industries can be public sector (owned by the state), private sector (owned by individuals or companies) and joint sector (cooperative ownership of both). On the basis of the nature of output, industries are divided into basic goods industries (steel, chemicals), capital goods industries (machines, tools) and consumer goods industries (textiles, electronics).
The location of industries depends on a combination of geographical, economic and historical factors. Access to raw materials is the most important factor for mineral-based industries, which are often located close to the source of minerals to reduce transport costs. Power supply, availability of cheap labour, proximity to markets, good transport and communication links, and capital are the other economic factors that determine where industries are established.
Political and historical factors also matter. Government policies, subsidies, tax concessions and the development of industrial estates can attract industries to particular regions. The port of Mumbai, the coal fields of eastern India and the hydroelectric power of the western ghats have shaped India's industrial geography. The location of industries is also affected by the "agglomeration economies", which are the cost advantages a firm enjoys by locating near other firms and services in an industrial region.
The German economist Alfred Weber proposed the least cost theory of industrial location in 1909. According to Weber, industries are located at the place where the total cost of production, particularly the cost of transporting raw materials and finished products, is the lowest. He introduced the concept of the "material index", which is the ratio of the weight of raw materials to the weight of the finished product. If the material index is more than one, the industry is raw material oriented and is located near the source of raw materials.
Weber's model identifies two main factors of location: transport cost and labour cost. He also introduced the concept of "agglomeration", the tendency of industries to cluster together for mutual benefit, and "degomeration", the dispersal of industries to avoid excessive congestion. Although Weber's theory is based on simplifying assumptions, it provides a useful framework for understanding industrial location, and his concept of the least cost location has been widely used in the planning of industrial development.
The iron and steel industry is the basic or foundational industry because it provides the machinery and materials for all other industries. It uses iron ore, coal, limestone and manganese as raw materials, and requires heavy capital and power. Major steel centres include Pittsburgh in the USA, Ruhr in Germany, Birmingham in the UK, and Jamshedpur, Bhilai and Rourkela in India. The industry is raw material oriented because iron ore and coal are heavy and bulky.
The cotton textile industry is the most important agro-based industry and the oldest manufacturing industry in India. It requires cotton fibre, water, labour and a humid climate. The textile industry developed first in Britain and later spread to Japan, China, India and other countries. The automobile industry, the petrochemical industry, the electronics industry and the aluminium smelting industry are other major manufacturing industries. Aluminium smelting is located near cheap sources of electricity because it requires huge amounts of power, and is an important example of a power-oriented industry.
Modern manufacturing has been transformed by high technology. The high-technology industry, which grew out of the electronics industry in the Silicon Valley of California, is a footloose industry because it is not tied to raw materials, power or markets. High-tech industries use skilled and educated workers, require little raw material and produce high-value products such as computers, microprocessors and software. They are located in pleasant environments that attract skilled professionals, near research universities and good airports.
The growth of high-tech industries has led to the rise of new industrial regions and has changed the meaning of the "factory". Modern production increasingly uses automation, robotics and digital technology, and industries are increasingly organised in global production networks. The tertiary and quaternary activities that support these industries, such as research, design, software and management, have become as important as the manufacturing itself, blurring the line between industrial and service economies.
| Basis | Types |
|---|---|
| Size | Cottage, Small-scale, Large-scale |
| Raw Material | Agro-based, Mineral-based, Forest-based, Marine-based |
| Ownership | Public, Private, Joint |
| Output | Basic goods, Capital goods, Consumer goods |
| Industry | Type | Location Features |
|---|---|---|
| Iron and Steel | Mineral-based, basic industry | Near coal and iron ore, e.g. Jamshedpur, Ruhr |
| Cotton Textile | Agro-based, oldest industry | Near cotton, water, humid climate |
| Aluminium Smelting | Power-oriented | Near cheap electricity |
| High-tech Electronics | Footloose | Near skilled labour and research centres |
| Petrochemical | Mineral-based | Near refineries and ports |
Secondary activities, especially manufacturing, are the engine of economic transformation because they convert the raw materials of primary activities into the goods that society needs. Industries are classified on the basis of size, raw material, ownership and output, and their location is governed by a mix of physical, economic, political and historical factors. Weber's least cost theory, with its concepts of the material index, agglomeration and deglomeration, provides a powerful framework for explaining why industries are where they are. From the raw-material-oriented iron and steel industry to the power-oriented aluminium smelting and the footloose high-technology industries, secondary activities continue to reshape the economic geography of the modern world.
Keywords: Secondary activities, manufacturing, classification of industries, Weber's least cost theory, material index, iron and steel, cotton textile, agglomeration.