Sector and industry are terms often thrown together but while they sound the same thing, they’re somewhat different. An industry is made up of specific groups that have similar roles. For instance, production and manufacturing companies fall into the industry category. Sectors form parts of the economy (on a large scale) and often include similar companies.
So, what are the differences between industry and sector, and what should you know about them?
Understanding An Industrial Sector
Typically, the term sector is a broad segment of the economy. It can group together similar industries such as the health sector. While you often think of health as one sector, it is actually a collective of several industries, such as research and development, manufacturing of medicines, primary care, and more. It is the same with the defense sector; it is made up of several parts to create one sector. An industry can be just one small part of a larger sector.
The Four Stages of a Sector
Sectors are also split into four subsectors. Those are primary, secondary, tertiary, and quaternary. So, the primary focuses on raw materials and their extraction. This can include forestry and mining for minerals or coal. The secondary sector deals with the process of those raw materials. It means focusing on industrial manufacturing and other such things. Tertiary involves support for primary and secondary sectors. For instance, communications, finance, and advertising often fall into this category.
The four subsector is quaternary and this involves intellectual means, such as research or education. So, while a business can fall into one industry field, it makes up a small part of the sectors. It isn’t as complicated as it sounds but each company plays a crucial role within the economy as a whole. Learn more about research and education by clicking here
Understanding an Industry
An industry is formed by several specific types of companies. For instance, the companies that form an industry have similar roles, such as production. Each group is different and makes up one industry as they are all distinctive in terms of what they offer. Cosmetics make up one industry, while entertainment forms another. They are similar because they offer a service and have a specific industry category they fall into. Oil Refinery, Chemical & Petrochemical plant abstract at night. Learn more about how to navigate the maze from brand awareness through purchase orders at https://www.samsungcctvusa.com/how-to-navigate-the-maze-from-brand-awareness-through-purchase-order/
The Differences in Scope
Industrial sectors are different from industries in terms of scope. For example, an industry’s scope works with a narrow window since it deals with similar companies. Some are often restricted to geographical locations which again, narrows their scope. On the other hand, a sector’s scope can vary. A sector can have a substantially larger scope since it deals with a larger portion of the economy. It could group together thousands of businesses even though they technically fall into different industry categories.
Making It Simple
Industries and sectors are often confused but they have similar responsibilities. A sector makes up a large portion of the economy because it groups together dozens of industries. On the other hand, an industry is made up of companies that have similar properties. It’s not as complicated as it sounds but it is important to know the differences in terms. Mainly, the difference lies in scope. Sectors tend to have a larger scope whereas an industry has a narrower option.