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 One classical breakdown of economic activity distinguishes three sectors: * Primary: involves the retrieval and production of raw materials, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the primary sect ...

in the

three-sector theory The three-sector model in economics divides Economy, economies into three Economic sector, sectors of activity: extraction of raw materials (Primary sector of the economy, primary), manufacturing (Secondary sector of the economy, secondary), ...

that describes the role of

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer ...

. It encompasses industries that

produce In American English, produce generally refers to wikt:fresh, fresh List of culinary fruits, fruits and Vegetable, vegetables intended to be Eating, eaten by humans, although other food products such as Dairy product, dairy products or Nut (foo ...

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 The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining. The primary sector tends to make up a larger portion of the economy in d ...

(i.e.

raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials/Intermediate goods that are feedstock for future finished ...

s like metals, wood) and creates

finished goods Finished goods are goods that have completed the manufacturing process but have not yet been sold or distributed to the end user. Manufacturing Manufacturing has three classes of inventory: # Raw material # Work in process # Finished goods A ...

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

consumer A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

s and for

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...

(via distribution through the

tertiary sector The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model (also known as the economic cycle). The others are the primary sector (raw materials) and the ...

). Many of these industries consume large quantities of energy, require

factories A factory, manufacturing plant or production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. Th ...

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 Waste heat is heat that is produced by a machine, or other process that uses energy, as a byproduct of doing work. All such processes give off some waste heat as a fundamental result of the laws of thermodynamics. Waste heat has lower utility ...

that may cause environmental problems or

pollution Pollution is the introduction of contaminants into the natural environment that cause harm. Pollution can take the form of any substance (solid, liquid, or gas) or energy (such as radioactivity, heat, sound, or light). Pollutants, the component ...

(see

negative externalities In economics, an externality is an indirect cost (external cost) or indirect benefit (external benefit) to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced ...

). Examples include textile production,

car manufacturing The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, selling, repairing, and modification of motor vehicles. It is one of the world's largest industries by ...

, and

handicraft A handicraft is a traditional main sector of craft making and applies to a wide range of creative and design activities that are related to making things with one's hands and skill, including work with textiles, moldable and rigid material ...

. 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 Development or developing may refer to: Arts *Development (music), the process by which thematic material is reshaped * Photographic development *Filmmaking, development phase, including finance and budgeting * Development hell, when a proje ...

. Nations that export manufactured products tend to generate higher marginal

GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...

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 Tax revenue is the income that is collected by governments through taxation. Taxation is the primary source of government revenue. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural reso ...

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 Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

. Among

developed countries A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...

, 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 Social mobility is the movement of individuals, families, households or other categories of people within or between social strata in a society. It is a change in social status relative to one's current social location within a given socie ...

for successive generations on the economy. Currently, an estimated 20% of the

labor force In macroeconomics, the workforce or labour force is the sum of people either working (i.e., the employed) or looking for work (i.e., the unemployed): \text = \text + \text Those neither working in the marketplace nor looking for work are out ...

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 Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created f ...

and other raw materials (i.e.,

) tend to grow slowly and remain either under-developed or

developing economies A developing country is a sovereign state with a less-developed industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. There is also no clear agreemen ...

. The value added through the transformation of raw materials into finished goods reliably generates greater

profitability In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. It is equal to total revenue minus total cost, including both Explicit co ...

, which underlies the faster growth of

developed economies In economics, economic development (or economic and social development) is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and object ...

References

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See also

References