Changes in business activity

Changes in business activity

The importance of each sector in an economy changes overtime.

Industrialization is the growing importance of secondary sector manufacturing industries in developing countries


  • Increase in GDP and higher standadrd of living
  • Increase in outputs, more exports and less imports
  • Expansion of manufacturing business means more jobs
  • Expanding and profitable firms will give more tax
  • Value is added to the countries raw materials


  • The chance of work in the manufacturing will move people from country to the town, which will lead social problems
  • Imports of raw material can increase import costs
  • Growth is due to the expansion of multinational countries

The situation is reversed in the develop countries. There is decline insecondary sector and increase in tertiary sector: De-industrialization.

Rising incomes, higher standards of living have led consumers to spend on services, eg tourism, hotels.

Due to industrialization manufacturing industries face more competition. Therefore rising imports of goods are taking market away from secondary sector

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