THE ECONOMY OF THE EUROPEAN UNION THE ECONOMIC

THE ECONOMY OF THE EUROPEAN UNION THE ECONOMIC SECTORS 1

INDUSTRY AS A SYSTEM INPUT PROCESSES OUTPUT • Labour • Capital • Land or natural resources • Entreprise • Assembling • Maintenance • Packaging • Transport • Product • Profit 2

INPUTS OR FACTORS OF PRODUCTION • INPUTS are things that go into the system. The main four inputs are: • Labour either skilled or unskilled. • Capital is the name given to items necessary to produce a good or service. Examples of capital are machines, buildings and money. • Land. These include sun, soil and water in primary industries and raw materials such as cotton, steel, coal, wood… • Enterprise is the most important factor of production as this is the process of bringing together the other factors to produce a good or service. 3

PROCESSES • PROCESSES are all things that happen to those inputs to help turn them into outputs. These include: • Production for example the manufacturing of cars or the sewing of textiles. • Factory maintenance, which is necessary to keep machines in working order. • Packaging, which protects products during transit and presents them in a way that makes customers want to buy them. • Transport, which is needed to move products from the factory to the warehouse and then on 4 to the shops.

FEEDBACK • FEEDBACK includes anything that improves the system, such as: • Customer feedback. Companies find out what consumers think of their products through market research. • A profit is the money left over after inputs (staff wages, raw materials…) have been paid for. Profits need to be high enough to make it worthwhile for the company to continue investing in making the product. 5

THE ECONOMIC SECTORS Economic activities can be classified into 4 areas according to what they do PRIMARY SECONDARY • Businesses that turn extract raw materials into from natural resources. finished products. 6

THE ECONOMIC SECTORS TERTIARY QUATERNARY • This sector involves the provision of services to consumers and businesses. • This sector consists of those industries providing information services and R&D 7

THE PRIMARY SECTOR Examples of primary businesses include: AGRICULTURE • Includes: • Production of crops. • Rearing of animals. FORESTRY • Includes: • Planting and taking care of trees. • Tree felling. • Christmas tree growers. 8

THE PRIMARY SECTOR Examples of primary businesses include: MINING • Includes the extraction of: • • Valuable minerals. Coal mines. Oil and gas extraction. All types of quarrying. FISHING • Includes: • Fishing fleets. • Salmon farms. • Trout farms. 9

THE SECONDARY SECTOR Manufacturing This includes the production of goods in large quantities. Construction This includes all types of building as well as the people who work on building sites. Secondary sector includes: Engineering This includes the design and use of equipment such as telecommunications 10

THE TERTIARY SECTOR • Tertiary businesses can be classified into 3 types: Private services Public services Voluntary services Services sold by privately-owned businesses Services provided by central or local charity and government voluntary organisations. Examples: • • • Banking Distribution Entertainment Retailing Tourism Transport • • Health care Education Military activity Social services Examples: • Community Health • Social and community care • Wildlife protection • Environmental protection 11

THE QUATERNARY SECTOR • The quaternary sector consists of those industries providing: • Information • Computing and Information and Communication Technologies (ICT) • Consultancy • Research and Development and Innovation 12

THE EMPLOYMENT STRUCTURE • It shows how the labour force is divided between the primary, secondary and tertiary sectors. • According to economic development it can be distinguished between: • More Economically Developed Countries (MEDCs) • Less Economically Developed Countries (LEDCs) • Developing countries 13

ACTIVITY 1 Locate on the map five MEDC and five LEDC 14

THE EMPLOYMENT STRUCTURE • In the richest countries there will usually be more people working in the tertiary and quaternary sectors. • In the poorest countries there tend to be more people working in the primary sector. 15

ACTIVITY 2 Look at the following statistics concerning the percentage distribution of the labour force by occupation Primary Afghanistan Andorra Secondary 80 10 0, 30 78, 90 100 75, 3 100 26 100 43 100 66 100 40 Brazil 14 93, 60 Continent 100 11 Bangladesh Burundi Total 21, 10 Australia Bolivia Tertiary 2, 30 100 Costa Rica 22 64 100 Egypt 17 51 100 78 100 Iceland Japan Maldives New Zealand USA 3 4, 40 27, 9 100 22 18 100 7 74 20, 3 100 79 100 16

ACTIVITY 2 • Complete the table of statistics. • Write down in last column the continent to which each country belongs. • What are three countries with a high percentage of their labour force working in the tertiary sector? • Are they MEDC or LEDC? • Name three countries with a high percentage of their labour force working in the primary sector? • Are they MEDC or LEDC? • Is there a Less Economically Developed Country with a high percentage of its labour force working in the tertiary sector? Why? 17

ACTIVITY 3 • Look at the diagram below. Based on the employment structures which countries do you think are the richest and the poorest? 18