More often, the economy is divided into three sectors: the primary, secondary, and tertiary sectors. The only problem with this classification system is that it precludes the fourth sector, including government agencies and agencies that are government-controlled.

The Primary Sector

The primary sector acts as a foundation for all other businesses. It creates the raw materials that go on to support every other sector. Industries that fall within the primary sector include:

In developing countries, the primary sector constitutes a large part of their economy. In the United States, the economy continues to see a gradual shift from the primary sector to the secondary and tertiary sectors, due to advancements in technology.

The Secondary Sector

Once the primary sector produces raw materials, the secondary sector transforms them into various products. The secondary sector includes the manufacturing industry, comprising a significant portion of the United States workforce. However, the Bureau of Labor Statistics expects employment in manufacturing to continue to decline.

Similar to the primary sector, technology is a major factor in the secondary sector’s decline. Technology allows manufacturers to get more done with fewer resources.

The Tertiary Sector

Most of the workers in the United States are members of the tertiary sector. This is the segment that provides a service to the public. Examples include:

  • hotels
  • retail industry
  • restaurants
  • sales

Each of these sectors relies on the products produced in the secondary and primary sectors. The tertiary sector also encompasses the transportation industry that goes on to deliver the secondary sector’s manufactured products to tertiary businesses.

Technology has created a subcategory within the tertiary sector known as the quaternary sector. This category includes phone, cable, and internet providers.

The Quaternary Sector

The Quaternary Industry narrates to the component of the economy that relates to specific business activity. It was also similar to the tertiary component on the services portion of a country’s capabilities. The Quaternary Industry offers a more specialised approach for example business consulting, research and development, data collection or specialised financial services.

The Tertiary Industry involves the provision of direct services to specific customers. Some services related to sales or retail businesses. This portion of the economy includes a majority of luxury-related services as well, especially in the tourism industry. Networking in the Quaternary Industry plays a key role in the marketing environment for example.

The Public Sector

Even though government agencies also provide a service to the public, this section is different from the tertiary sector. In fact, it requires a completely separate consideration.

Examples of the public sector include:

  • libraries
  • schools

The public sector includes any organization owned or operated by a government agency. Unlike the private sector, these organizations rely on taxpayer dollars instead of revenue from customers who are paying for goods or services.

These agencies may outsource work to private contractors which will then perform the work for private and public sector clients.