In
macroeconomics
Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (econ ...
, the secondary sector of the economy is an
economic sector in the
three-sector theory that describes the role of
manufacturing. It encompasses
industries that
produce a finished, usable
product or are involved in
construction
Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...
.
This sector generally takes the output of the
primary sector (i.e.
raw materials like metals, wood) and creates
finished goods suitable for sale to domestic
business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
es or
consumers and for
export (via distribution through the
tertiary sector). Many of these industries consume large quantities of energy, require
factories and use machinery; they are often classified as
light
Light, visible light, or visible radiation is electromagnetic radiation that can be visual perception, perceived by the human eye. Visible light spans the visible spectrum and is usually defined as having wavelengths in the range of 400– ...
or
heavy based on such quantities. This also produces
waste
Waste are unwanted or unusable materials. Waste is any substance discarded after primary use, or is worthless, defective and of no use. A by-product, by contrast is a joint product of relatively minor Value (economics), economic value. A wast ...
materials and
waste heat that may cause environmental problems or
pollution (see
negative externalities). Examples include
textile production,
car manufacturing, and
handicraft.
Manufacturing is an important activity in promoting
economic growth
In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
and
development. Nations that export manufactured products tend to generate higher marginal
GDP growth, which supports higher
income
Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. F ...
s and therefore marginal
tax revenue needed to fund such government expenditures as
health care
Health care, or healthcare, is the improvement or maintenance of health via the preventive healthcare, prevention, diagnosis, therapy, treatment, wikt:amelioration, amelioration or cure of disease, illness, injury, and other disability, physic ...
and
infrastructure. Among
developed countries, it is an important source of well-paying jobs for the
middle class
The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. C ...
(e.g., engineering) to facilitate greater
social mobility for successive generations on the economy. Currently, an estimated 20% of the
labor force in the United States is involved in the secondary industry.
The secondary sector depends on the primary sector for the raw materials necessary for production. Countries that primarily produce
agricultural and other raw materials (i.e.,
primary sector) tend to grow slowly and remain either
under-developed or
developing economies. The value added through the transformation of raw materials into finished goods reliably generates greater
profitability, which underlies the faster growth of
developed economies.
See also
*
List of countries by manufacturing output
References
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