Industry (economics)

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Cement factories, part of the manufacturing industry, produce product for the construction industry (also known as the building industry). This factory was in Malmo, Sweden. Cementfabriken pa Limhamn-flygbild 06 september 2014.jpg
Cement factories, part of the manufacturing industry, produce product for the construction industry (also known as the building industry). This factory was in Malmö, Sweden.
Burj al Arab as a symbol for the hospitality industry Burj Al Arab, Dubai, by Joi Ito Dec2007.jpg
Burj al Arab as a symbol for the hospitality industry
An image of the motor industry (automotive industry), a supplier to the transport industry. Economists may regard the manufacture of vehicles as a foundational industry and as a bellwether industry. Geely assembly line in Beilun, Ningbo.JPG
An image of the motor industry (automotive industry), a supplier to the transport industry. Economists may regard the manufacture of vehicles as a foundational industry and as a bellwether industry.

In macroeconomics, an industry is a branch of an economy that produces a closely-related set of raw materials, goods, or services. [2] For example, one might refer to the wood industry or to the insurance industry.

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When evaluating a single group or company, its dominant source of revenue is typically used by industry classifications to classify it within a specific industry. [3] For example the International Standard Industrial Classification (ISIC) – used directly or through derived classifications for the official statistics of most countries worldwide – classifies "statistical units" by the "economic activity in which they mainly engage". Industry is then defined as "set of statistical units that are classified into the same ISIC category". [4] However, a single business need not belong just to one industry, such as when a large business (often referred to as a conglomerate) diversifies across separate industries.

Industries, though associated with specific products, processes, and consumer markets, can evolve over time. One distinct industry (for example, barrelmaking) may become limited to a tiny niche market and get mostly re-classified into another industry using new techniques. At the same time, entirely new industries may branch off from older ones once a significant market becomes apparent[ citation needed ] (as the semiconductor industry became distinguished from the wider electronics industry).

Industry classification is valuable for economic analysis because it leads to largely distinct categories with simple relationships. However, more complex cases, such as otherwise different processes yielding similar products, require an element of standardization and prevent any one schema from fitting all possible uses.

Economic theories group industries further into larger categories dubbed economic sectors.

See also

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The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model. The others are the primary sector and the secondary sector (manufacturing).

<span class="mw-page-title-main">Confectionery</span> Prepared foods rich in sugar and carbohydrates

Confectionery is the art of making confections, which are food items that are rich in sugar and carbohydrates. Exact definitions are difficult. In general, however, confectionery is divided into two broad and somewhat overlapping categories: bakers' confections and sugar confections. The occupation of confectioner encompasses the categories of cooking performed by both the French patissier and the confiseur.

<span class="mw-page-title-main">North American Industry Classification System</span> Standard for classifying business establishments

The North American Industry Classification System or NAICS is a classification of business establishments by type of economic activity. It is used by government and business in Canada, Mexico, and the United States of America. It has largely replaced the older Standard Industrial Classification (SIC) system, except in some government agencies, such as the U.S. Securities and Exchange Commission (SEC).

The Standard Industrial Classification (SIC) was a system for classifying industries by a four-digit code as a method of standardizing industry classification for statistical purposes across agencies. Established in the United States in 1937, it is used by government agencies to classify industry areas. Similar SIC systems are also used by agencies in other countries, e.g., by the United Kingdom's Companies House.

Classification is a process related to categorization, the process in which ideas and objects are recognized, differentiated and understood. Classification is the grouping of related facts into classes. It may also refer to:

<span class="mw-page-title-main">Public finance</span> Study of the role of government within the economy

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The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products. It came into effect in 1988 and has since been developed and maintained by the World Customs Organization (WCO), an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries.

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The United Kingdom Standard Industrial Classification of Economic Activities, or UKSIC, is a Standard Industrial Classification that is intended to help classify businesses according to the type of their economic activity. One or more SIC codes can be attributed to a business. SIC codes identify what a business does.

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The Refinitiv Business Classification (TRBC) is an industry classification of global companies. It was developed by the Reuters Group under the name Reuters Business Sector Scheme (RBSS), was rebranded to Thomson Reuters Business Classification (TRBC) when the Thomson Corporation acquired the Reuters Group in 2008, forming Thomson Reuters, and was rebranded again, to The Refinitiv Business Classification (TRBC), in 2020. Since the creation of Refinitiv in October 2018, TRBC has been owned and operated by Refinitiv and is the basis for Refinitiv Indices.

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Tobacco Industry is a road map of the regulations relating to all tobacco products in Indonesia. Tobacco Industry (TI) contains guidelines and industry classification and the products produced by the tobacco industry in Indonesia, including regulations, policies ribbon and excise, tobacco industry strategies, so on and so forth. Tobacco Industry was first coined by the Directorate General of Agro and Chemical Industry Department in 2009. Tobacco Industry has a significant role for state revenue through taxes and excise, employments, and protection against multiple impacts of tobacco farmers and others. The development of the TI also consider public health in addition to concern on, so that the industry can grow well. TP is a labor-intensive industry, so to the present of TI and its association with upstream form the procurement of raw materials, particularly tobacco, cloves, and other industries are potential labor-absorbing industrial.

Industry averages are generally using as benchmarks or tools which helps business to make comparisons that helps to determine its position within the industry and evaluate financial performance of the business. It is a useful tool for business managers and investors, helps with decision making process. It represent data figures of various business organizations across different industries of producing distinct products and services. Some individuals and organizations use industry averages as a useful tools, it gives a medium level of all other competitors performance. Compare their own data figure with those averages, it could help individual or organization to make decisions and predictions about possible outcomes. Such as, Investors compare an organization's financial ratios with industry averages to evaluate whether the organization have potential power to growth in the future, and level of risk for the investment. All those factors contribute to decision making and deeper analysis. Data required can be collect through survey or through several professional statistic websites, for individuals are more likely to obtain information using internet. Industry averages could also refer to terms related to industrial sector such as industry averages salaries, unemployment rates, Clickthrough rates and so on, using as benchmarks for comparisons.

The retail format influences the consumer's store choice and addresses the consumer's expectations. At its most basic level, a retail format is a simple marketplace, that is; a location where goods and services are exchanged. In some parts of the world, the retail sector is still dominated by small family-run stores, but large retail chains are increasingly dominating the sector, because they can exert considerable buying power and pass on the savings in the form of lower prices. Many of these large retail chains also produce their own private labels which compete alongside manufacturer brands. Considerable consolidation of retail stores has changed the retail landscape, transferring power away from wholesalers and into the hands of the large retail chains.

References

  1. Norton, Norton (26 March 2015) [2007]. "General Motors: Lost Dominance". In Tremblay, Victor J.; Tremblay, Carol Horton (eds.). Industry and Firm Studies (4 ed.). London: Routledge (published 2015). p. 271. ISBN   9781317468028 . Retrieved 10 October 2021. It was noteworthy that GM's dominance was in an extremely important industry. In simplest economic terms, it is a foundational industry. [...] The motor vehicle industry is a bellwether industry—its success has long been a signal of the state of the American economy.
  2. Compare: "Industry". Merriam-Webster.com Dictionary. Merriam-Webster. 4 August 2020. Retrieved 11 August 2020. 1 b: a distinct group of productive or profit-making enterprises [...]
    c: a department or branch of a craft, art, business, or manufacture
  3. "'Definition of Industry' Investopedia". 2003-11-20. Archived from the original on 2017-07-22. Retrieved 2015-05-22. Individual companies are generally classified into an industry based on their largest sources of revenue. For example, while an automobile manufacturer might have a financing division that contributes 10% to the firm's overall revenues, the company would be classified in the automaker industry by most classification systems.
  4. International Standard Industrial Classification of All Economic Activities (ISIC), Rev.4 (PDF). New York: United Nations Publication. 2008. p. 3. ISBN   978-92-1-161518-0. 6. The classification is used to classify statistical units, such as establishments or enterprises, according to the economic activity in which they mainly engage. At each level of ISIC, each statistical unit is assigned to one and only one ISIC code, as set out below. The set of statistical units that are classified into the same ISIC category is then often referred to as an industry […]