Secondary activities

From CEOpedia | Management online

Secondary activities - it is a type of activity which uses a raw material received by primary activities and manufacture, or turn this into different products which are used by the people. This activity involves the industry of construction and the installation of elements made by other secondary productions. An example is a housebuilding, car assembly or steelmaking [1].

The essence of the secondary activities

All kinds of activities depend upon a grouping of elements. They are called factors . We could distinguish two categories of these. The first one is named natural, physical and the second one is called artificial or economic, sometimes human. The natural factor is a climate (rainfall, temperature), relief (height of land, steepness of land), soils, and resources like materials and energy. Next, economic factors are markets (where good are sold), labor (wages, quality, and quantity), capital (money available), transport (cost and types), technology (recent innovations), government help (national) and the last one- environment (nearness, attractiveness). In the secondary type of activity, the most important is the human factor. They tend to have a bigger influence [2].

Secondary activities in use

A lot of enterprises venture just one type of activity. Some of them, nevertheless, undertake many different activities, making it hard to locate them in a particular industry. Although, these several, there are big and have got huge importance. The accounts manage this with an idea of two strategies [3] :

  • "First, enterprises are subdivided into establishments, and the classification may be done at the level of the establishment rather than the enterprise. An establishment is a unit that carries out all of its activities at a single location and engages in one predominant type of activity. For example, one factory owned by a multinational company could constitute an establishment."
  • Next, activities are divided into principal, secondary and ancillary. Secondary and principal activities have to involve the creation of good, services, that can be sold to another enterprise, even though they may be not sold. Often, goods are used away from the company, such as if the business manufactured elements of use by another appointment within the same company.

Categories of the activities according to the science

Over the world exist a wide range of activities and different categories of them. Usually, there are divided into three. Apart from secondary, there are also two different. One is known as the primary , the next are tertiary sectors. Primary activities include collecting natural resources or extracting from nature. An example is fishing, farming, mining, quarrying or forestry. Tertiary activities are connected with providing people a service. There might be teaching, driving buses, nursing or selling cars [4].

Examples of Secondary activities

  • Manufacturing: Manufacturing is the production of goods in large quantities, typically using machinery and other industrial processes. Examples of manufacturing include car assembly, steelmaking, furniture making, and electronics production.
  • Construction: Construction is the process of constructing buildings or other structures. Examples of construction include residential construction, commercial construction, and industrial construction.
  • Installation: Installation is the process of installing and setting up equipment, machinery, and other items. Examples of installation include installing HVAC systems, installing elevators, and installing security systems.
  • Mining: Mining is the process of extracting minerals from the earth. Examples of mining include coal mining, gold mining, and diamond mining.
  • Agriculture: Agriculture is the process of cultivating crops and raising livestock for food and other products. Examples of agriculture include crop farming, livestock farming, and dairy farming.

Advantages of Secondary activities

Secondary activities have many advantages. These include:

  • Creation of jobs and economic growth, as the production of goods is essential for any economy. This can have a positive impact on the local community, as more people are employed and the local GDP increases.
  • Secondary activities can provide goods and services that are not available in primary activities, such as the production of items that require more complex processes or specialized equipment.
  • Secondary activities can also create new markets and industries, such as the production of automobiles or electronics.
  • Secondary activities can help create a more competitive environment in the market, as different companies can compete to offer the best products and services.
  • Secondary activities can also provide an opportunity for innovation, as new processes and technologies are developed to improve the production of goods.

Limitations of Secondary activities

Secondary activities have several limitations which can affect the overall efficiency of the process. The following are some of the most common limitations:

  • Dependence on primary activities: Secondary activities are highly dependent on primary activities as they rely on raw materials produced by the latter. As such, any disruption or changes in the primary activities can have a significant impact on the secondary activities.
  • Time-consuming: Secondary activities often take a longer time to complete compared to primary activities. This is due to the fact that the raw material needs to be processed before it can be used in the secondary activities.
  • Costly: Secondary activities require a large amount of capital and resources to complete. This can make them more expensive than primary activities.
  • Risk of failure: Secondary activities can fail if the raw materials are not of good quality or if the process is not completed properly. This can lead to significant financial losses.

Other approaches related to Secondary activities

Secondary activities involve activities that use the raw materials and products of primary activities and transform them into items that people can use. These activities can include:

  • Construction and installation, such as housebuilding and car assembly;
  • Manufacturing and fabrication, such as steelmaking and automotive production;
  • Repair and maintenance, such as automotive repair and computer maintenance;
  • Distribution and retail, such as warehousing and online retail;
  • Education and training, such as online classes and apprenticeships;
  • Entertainment and leisure, such as amusement parks and cinemas;
  • Financial services, such as banking and accounting;
  • Information and communication, such as web design and customer service;
  • Professional services, such as legal and medical services;
  • Public administration, such as government services and policymaking;
  • Research and development, such as engineering and scientific research.

In summary, secondary activities involve activities that use the raw materials and products of primary activities to create items that people can use, such as construction and installation, manufacturing and fabrication, repair and maintenance, distribution and retail, education and training, entertainment and leisure, financial services, information and communication, professional services, public administration, and research and development.


Secondary activities — recommended articles
Service economy — Capital resource — Commercial sector — Industry — Economic infrastructure — Product — Fixed capital — Basic industry — Trade waste

References

Footnotes

  1. ↑ Waugh D. 2004, p. 66
  2. ↑ Waugh D. 2004, p. 68
  3. ↑ Hecht J. 2005, p. 27
  4. ↑ Waugh D. 2004, p. 66

Author: Aleksandra Zegiel

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