Business activity is divided into three categories: primary, secondary and tertiary. Primary activities include extracting raw materials. Secondary activities involve manufacturing and construction. Tertiary activities are based on providing a service. In order to completely understand tertiary activities, you must be familiar with primary and secondary activities as they are directly linked.
Primary and Secondary
Primary activities include extracting raw materials that are prepared for production. Nevertheless, primary companies sometimes deal directly with finished goods, rather than just raw materials. Miners extract coal, minerals and fuel that may initially be part of raw materials. Similarly, farmers grow crops that can be ready for consumption and thus are not considered raw material. Secondary industry includes manufacturing and construction-related activities. Manufacturers use the raw materials provided by primary industries for production. Examples of manufactured products include books, chairs, bicycles and vehicles.
Tertiary activities are service based and give non-tangible value to customers. Examples of companies that work in this sector include banks, consulting and public transportation. Most companies that are involved in tertiary activities do not have operations involving primary or secondary activities. The tertiary sector is the fastest growing industry in today's economic world.
Tertiary activities are generally divided into into four categories: social services, distribution services, services to companies and services to consumers. Social services are provided by public and private sectors and they include activities related to administration, education and healthcare. Distribution services are activities that deal with the movement of people, goods and information from one place to another. Services to companies are the activities that are contracted to other companies or organizations. Services to consumers include catering businesses, repairs, cleaning and hotels.
Tertiary activities typically require qualification and personal effort. The value that is given in the tertiary sector cannot be stored. Services are demanded when needed and thus must be close to consumers. The tertiary sector has a low level of mechanization. Most services cannot be offered using machinery.