Basic industry

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The Basic industry is one whose liquidation would result in serious threats to the country[1]. Competence and quality of products on foreign markets are defined by a continuous and stable increase in exports of local industry products to countries around the world [2]. According to the U.S Department of the Interior "The basic industry (also called primary or direct) is one that imports money from outside the area by producing goods and services for export" [3]. According too the E. R. Nichols "Basic industries is a term for which it is impossible to draw up a completely acceptable definition. Recent Congressional legislation aimed at basic industries usually speaks of industries whose shut-down would "threaten, or result in danger to the public health and safety"" [4].The basic industries are those that have developed on a large scale[5].

  • In United States[6]:
  1. iron production
  2. production of textiles and clothing
  3. vehicle production
  4. IC producer[7].
  5. steel industry[8].
  • In United Arab Emirates[9]:
  1. crude oil industry.

United States integrated circuit industry

The United States has been a leader in the integrated circuit industry for years until it began to lose its advantage over Japanese producers.The US integrated circuit industry has been considered the fastest-growing technologically for a quarter-century compared to all manufacturing sectors on the US market.The technological revolution was associated with improvements made in this sector. Falling prices and increasing product performance have created new channels for sharing innovative solutions in the production of electronic goods.the US IC industry has integrated with the growth and employment in the US economy [10].

The industrial sector in the United Arab Emirates

Crude oil production and exports were the first to start industry in the United Arab Emirates.The economic policy of the U.A.E is to create substitute sources of financing. In order to reduce oil dependence, the economic base has been adapted to the upcoming changes. The strategy adopted by the UAE was to develop industries and base them on available factors necessary for further development, such as very rich energy sources, huge capital, and mineral and raw materials used, among others, in construction.A huge number of processing and manufacturing industries was created thanks to massive investments focused on the development of industrial sectors. These sectors use hydrocarbons as raw materials, for example, oil refineries and fertilizer plants. A very branched system of the consumer industry was created to meet the demand of local consumers for food, fiberglass products as well as textile products [11].

Examples of Basic industry

  1. Agriculture:* Agriculture is a basic industry that is vital to a country's economic and social development. It is the main source of food for millions of people around the world and plays a major role in providing employment, income, and nutrition. Agriculture is also essential in providing raw materials for industries such as textile, paper, and pharmaceuticals.
  2. Energy:* Energy is an essential basic industry for any country. It is necessary for the production of goods and services, as well as for sustaining the modern lifestyle of its citizens. Power plants provide electricity, natural gas, and oil to run the everyday activities of people, businesses, and governments.
  3. Transportation:* Transportation is another basic industry that is vital to a country's economic and social development. This industry is responsible for connecting people, goods, and services. It is essential for the efficient production and delivery of goods and services, which are essential for economic growth.
  4. Manufacturing:* Manufacturing is a basic industry that is necessary for the production of goods and services. It involves the transformation of raw materials into useful products and is essential for economic growth and development. Manufacturing is also vital in providing employment, income, and nutrition.

Advantages of Basic industry

The Basic industry has many advantages for a country and its citizens, including:

  • Providing stable, well-paying jobs for a large portion of the population, as these industries often require significant amounts of labor.
  • Generating government revenue through taxes, which can then be used to fund other programs.
  • Offering a range of goods and services that are essential to the everyday lives of citizens, from food items to transportation.
  • Stimulating growth in other industries, as the success of basic industries will often lead to the growth of related sectors.
  • Helping to diversify a country’s economy and reduce its reliance on a single sector or market.
  • Creating a stable source of resources that can be used to manufacture goods or facilitate trade.
  • Providing a platform for the development of new technologies, as well as the development of a skilled labor force.

Limitations of Basic industry

The basic industry is an essential component of a country's economy, providing the foundation for other industries and sectors. However, it also has a few limitations that can pose serious threats to the country's overall economic health. These limitations include:

  • High capital requirements: The high capital requirements associated with basic industries can make it difficult to establish and operate these businesses, as well as create an uncertain economic environment.
  • Limited access to resources: Because of the nature of the industry, it is often difficult to access resources necessary for the production of goods and services. This can lead to cost increases and ultimately limit the industry's growth.
  • Difficult to innovate: Innovation is important for any industry to remain competitive and successful, however, the basic industry often lacks the necessary resources to innovate and develop new products and services.
  • Increased competition: The basic industry often faces more competition from domestic and foreign competitors, which can lead to price wars and lower profits.
  • Social and environmental impacts: The basic industry can have negative effects on the environment, such as water and air pollution, as well as social and economic impacts, such as displacement of communities.

Other approaches related to Basic industry

The Basic industry is a vital sector that helps maintain the economic stability of a country. Other approaches that are used to maintain its stability include:

  • Diversification of the industry: Diversification helps reduce the risk of the industry in a country, by introducing new products and services to the marketplace.
  • Stimulating investment: Stimulating investment in the industry helps to create new jobs, increase productivity and develop new technology.
  • Fostering research and development: Research and development are key to staying competitive in the industry, and fostering these activities can help maintain the industry's viability.
  • Ensuring sound regulation: Ensuring that the industry is well regulated helps to ensure that the industry can operate effectively and safely.

In conclusion, the Basic industry is a vital sector that requires careful consideration and management to ensure its stability. Other approaches, such as diversification, stimulating investment, fostering research and development, and ensuring sound regulation, can help maintain the industry's viability in a country.


Basic industry — recommended articles
Economic factor — Examples of opportunities — Agribusiness — Importance of international business — Examples of threats — Green innovation — Economic infrastructure — International division of labor — Export incentives

References

Footnotes

  1. ↑ Nichols E. R. (1947)
  2. ↑ Business Law Handbook (2015)
  3. ↑ An Ecological Characterization of the Central and Northern California Coastal Region Basic concepts(1981)
  4. ↑ Nichols E. R. (1947)
  5. ↑ M. Feldstein (2008)
  6. ↑ M. Feldstein (2008)
  7. ↑ Shoven J. B. (2006)
  8. ↑ Garay R. G.(2011)
  9. ↑ Business Law Handbook (2015)
  10. ↑ Shoven J. B. (2006)
  11. ↑ Business Law Handbook (2015)

Author: Barbara Rojek

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