Question

Explain the role of secondary sector in an economy.

Hint:

Explain what the secondary sector does, then cover value addition to raw materials, employment, support to agriculture, export earnings, and the growth it creates in transport, banking and trade.

Answer 1

Concept:

• The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing.
• Because the product is made and not gathered, this sector is also called the industrial sector, and it stands between the primary sector that supplies raw material and the tertiary sector that carries and sells the goods.

Step 1: It adds value to the produce of the primary sector.
Cotton grown in a field is worth far less than the yarn spun from it, and yarn is worth less than cloth. Sugarcane becomes sugar, iron ore becomes steel, and clay becomes bricks.
Each step of manufacture raises the value of the same raw material, and that added value stays within the country.

Step 2: It provides employment on a large scale.
Factories and workshops absorb workers in numbers that farming cannot, and they employ people throughout the year rather than only in the sowing and harvesting seasons.
This gives an escape from the disguised unemployment found in agriculture.

Step 3: It strengthens agriculture itself.
The secondary sector supplies the farmer with tractors, pumps, ploughs, fertilisers and pesticides, and it buys the produce for processing.
Industry therefore does not compete with farming but raises its output and gives it a market.

Step 4: It earns foreign exchange and supports trade.
Manufactured goods such as textiles, engineering products, chemicals and vehicles are exported, and the foreign exchange earned pays for the machinery, crude oil and technology that must be imported.
A country that exports finished goods earns far more than one exporting only raw materials.

Step 5: It pulls the rest of the economy forward.
A factory needs transport, banking, insurance, storage and repair work, so the growth of industry creates work in the tertiary sector as well. Towns grow around industrial centres and infrastructure such as roads and power follows.

Final Answer: The secondary sector turns raw material into more valuable goods, creates steady employment, supplies agriculture with modern inputs, earns foreign exchange through exports of manufactures, and draws transport, trade and banking along with it. It is therefore treated as the backbone of economic development.