A sector of the economy in which firms use similar factor inputs to create a group of related products and/or services. The extraction of natural resources, including agriculture, is primary industry; manufacturing is secondary industry; tertiary industry comprises services, including transportation and communication; quaternary industry deals with a range of producer services from banking to retailing to real estate; and quinary industry with consumer services such as education, health care, and government information. With economic development, industry moves from primary industry to progressively less material-oriented activities such as textiles and clothing, until, over time, tertiary industries dominate; the sequence is illustrated in the figure.
The relative dominance of the latter three categories over the former two in many industrialized countries has informed discussions of a post-industrial society, in which Miozzo and Soete (2001) Tech. Forecast. & Soc. 67, 2 identify research and development, design, marketing, distribution, and after-sales maintenance as essential.
Phelps and Ozawa (2003) PHG 27, 5 propose four industrial phases.
| Protoindustrial | Industrial | Late industrial | Post-industrial |
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Sectorial basis | Agriculture-manufacturing | Manufacturing | Manufacturing | Services-manufacturing |
Division of labour | Intra-firm, intra- and inter-sectorial | Inter-firm and inter-sectorial | Intra- and inter-firm, intra-sectorial | Inter- and inter-firm, inter- and intra-sectorial |
Source of accumulation | Exports →domestic | Domestic → exports | Domestic → exports | Exports → domestic |