Categories of Industry Flashcards
Factors of Production
Four essential resources that entrepreneurs combine to make a product or a service. Land, Labour, Capital and enterprise.
Land
the natural resources that give us raw materials and energy needed for all business activities.
Economic Return: Rent
Labour
the human work and effort needed for a business to operate. Almost every firm needs to employ staff with the appropriate set of skills.
Economic Return: wages
Capital
anything man made used in the running of the business. Economic Return: Interest
Enterprise
the human creativity and initiative required to pull together the other three factors and start running a business to provide goods and services.
Economic Return: Profit.
What is Industry + categories
A group of businesses engaged in producing similar goods and services.
Primary- extraction of natural resources
Secondary- manufacturing and construction
Tertiary- Service providers.
Importance of the Primary Sector to the Irish Economy
*minimise imports by providing raw materials.
*maximise exports by selling our agri products to other countries.
*Providing employment and minimise those needing social welfare.
Primary Sector Trends and Challenges
*Diversification, many farmers are forced to diversify to keep in business e.g. solar energy.
*Consumer concerns, amongst consumers over food issues and excess use of antibiotics in meat products as well as the increased use of chemicals and pesticides, and growth in veganism.
*Climate Change, extreme weather conditions may be an issue for the industry.
*Primary Sector reliance on direct payments. Farmers are relying on the payment from the EU Common Agricultural Policy and if this is removed then farming will not be feasible for some.
Construction, Importance to the Irish Economy
*use of Irish resources keeps money in Ireland
* Lots of employment because construction work is intense.
Trends and Challenges of Construction
*this industry is very sensitive to economic fluctuations. When economy is well so is construction and vice versa.
*Shortages of houses around Ireland with many people unable to afford to rent of buy a home.
Manufacturing, Importance to the Irish Economy
*employment
*exports goods to other countries which brings money into Ireland.
Trends and Challenges of Manufacturing
*employment is decreasing due to the increase of machinery in the industry
*relocation of operations to other countries where they can pay their employees less.
Agribusiness, Importance to the Irish Economy
*employment
*key factor in the Irish economy as it buys most of its raw materials from Irish Businesses and exports over 50% of its outputs.
Trends and Challenges of Agribusiness
*Retail power, Shops like Aldi and Lidl get their products cheaper from other countries which creates less of a need for Irish products. Farmers will have to charge lower prices if they want their products on the shelves.
*unpredictable weather will affect the supply of materials.
*Mergers and Acquisitions makes it harder for smaller businesses to compete with larger ones.
Importance of the Tertiary Sector to the Irish Economy
*employment
*tourism which makes people spend money in the country
*Attracts TNC’s because of our developed sector.
Trends and Challenges of the Tertiary Sector
*consumers like to shop around which results in more shops like Aldi and Lidl coming to Ireland.
*Minimum wage increases and pay rise means increased costs for business
*Growth in online shopping make Irish businesses find it hard to compete in terms of price and choice.
*Increased automation leading to unemployment in banks and train stations for example and increased use of AI.
Benefits of the Sectors (5)
- EMPLOYMENT- increased the standard of living and reduces social welfare payments.
- GOVERNMENT REVENUE- low corporation tax makes Ireland an attractive place to establish a business. The government uses tax to invest in schools, healthcare and transport.
- FOOD- local food production reduces CO2 emissions and Ireland’s impact on global warming.
- EXPORTS- benefit the economy as they bring currency into the country which can be used to pay for imports.
- RAW MATERIALS- secondary sector uses raw materials from the primary sector to produce goods. This increases sales for the primary sector.
