Key definitions
Private sector — businesses owned and run by private individuals.
Public sector — businesses owned and run by the government.
Mixed economy — an economy where both private and public sector businesses co-exist.
Types of industries
| Sector | Description |
|---|---|
| Primary | Industries that extract raw materials from the Earth. |
| Secondary | Industries that convert raw materials into finished goods. |
| Tertiary | Industries that provide services. |
Reasons for changing importance of business classification
- Industrialisation — the changing of an economy's focus from the primary to the secondary sector.
- Usually occurs in LEDCs/NICs.
- Deindustrialisation — the changing of an economy's focus from the secondary to the tertiary sector.
- Usually occurs in NICs/MEDCs.