Economic Activity
Geography: Edexcel A Level, topic 5.1.1
Types of Economic Activity
Economies can be classified in different ways. Different economies all have different features. Economic activity is split into four main economic sectors:
Primary economic activity
- Primary economic activity usually involves some kind of raw materials.
- Some examples of primary economic activity are farming, cutting down trees for making paper and mining (extracting things like iron ore).
- Finland is famous for its pulp (used to make paper) industry. It produces €17bn in its forestry industry each year. The company Nokia started out as a pulp mill.
Secondary economic activity
- Secondary economic activity involves the next stage of activity after primary, usually doing something to the raw materials.
- Manufacturing the paper after the trees have been chopped down would fit in the category of secondary economic activity.
- In the UK, James Cropper in the Lake District produces paper from the raw material, pulp. This is secondary economic activity.
Tertiary economic activity
- Tertiary economic activity involves providing services to other people in the economy.
- Transport companies like taxi drivers, doctors working in healthcare and restaurants like Nando's are all in the tertiary sector of the economy.
Quaternary economic activity
- Quaternary economic activity involves services like IT software and scientific research and development.
- Pension fund/asset management companies and design consultancies may also be classified in the quaternary sector.
Economic Activity in the UK
Rural and urban areas of the UK generally do different types of economic activities. There are also specific clusters of heightened economic activity that have developed.
Rural areas
- Rural areas usually have more primary activity in the UK.
- Agriculture usually takes place in the countryside in places like Cumbria and Somerset.
- Jobs in these places and industries are often low paid and involve manual work.
Urban areas
- Urban areas usually have higher proportions of secondary and tertiary activity.
- Employment in services industries makes up over 80% of all employment in the UK.
- Urban areas like London do not have much primary economic activity (e.g. mining or farming).
Specific areas/clusters
- Quaternary employment in the UK is concentrated in specific areas.
- In the UK, most quaternary employment happens around important universities and in the M4 corridor (London, Reading, Bristol, Bath and Cardiff).
- There are also clusters of activity around the universities of Oxford and Cambridge because there are often spillover effects that make it good for firms to locate there (e.g. access to good talented workers).
Test yourself on Economic Activity
The people who serve food in Nandos are part of which economic sector?
Rural areas usually have more of what type of economic activity sector in the UK?
Where in the UK is agricultural (primary) activity more likely to happen?
Roughly what percentage of UK employment is in the services (tertiary) sector?