Primary sector

The primary sector is that portion of an economy that extracts or cultivates resources as primary goods. Examples of these are iron ore, petroleum, grains, fruits, fish, and cattle. As goods from or of the Earth, they compose the essential elements of global resources and are of an inherently finite nature.

Background

The goods of the Earth are commonly categorized as animal, vegetable, or mineral. These must be processed to become the human essentials of food, clothing, and shelter. Economists generally divide the stages of this processing or transforming into three sectors: primary, secondary, and tertiary. The first classifies activities that produce raw materials; the second consists of manufacturing activities that change materials into usable products; and the third provides services to sustain the economic processes.

Origin

The concept of a three-sector economy originated in the mid-twentieth century. It responded to attempts to measure the value of a national economy and to identify the proportion of those types of production that created these values. It attempted both to measure and evaluate national production. The British economic statistician Colin Clark published a series of books and articles in the 1930s describing the concept of and methodology for calculating a nation’s income. This research formed the basis for calculating the annual sum of all goods and services produced in a country, named the gross domestic product (GDP).

A French economist, Jean Fourastié, classified national production in categories or sectors. Defining and measuring these sectors profiled an economy not only for a particular moment but also as it changed over time. An American economist, Walt Whitman Rostow, compared the development of national economies, suggesting that they underwent linear patterns, beginning with the primary sector and advancing to the secondary and tertiary sectors. Developed economies were those that had a greater proportion of their production in the latter rather than the former sectors. The relative proportions of the sectors became the stages of development.

An ambiguity may arise regarding calculation of the primary sector because of procedures for processing certain commodities. The cane harvested on sugar plantations is heavy and thereby expensive to ship to a sugar-refining factory. Plantations have sugar mills to extract and then boil cane syrup, drying and molding it for efficiency and economy in shipping it to a factory. This milling process is a secondary-sector function. Generally, manufacturing on a site of cultivation or extraction is categorized in the primary sector.

Characteristics of Economic Sectors

The primary sector is the primal in an economy. Both in the colonial and early republican periods of the United States, the economy was dominated by the primary sector. Its internal and exports were based on agriculture, ranching, and mining. However, from this base and with advances in mechanization that supported industrialization, particularly after the Civil War, the country became a manufacturing economy. Iron became steel forged into rails, trains, and factory machines. Cattle was processed into meat, stored in refrigerated ships, and shipped abroad. Both of these dynamic sectors prompted ever greater demands for services, banking, insurance, education, and legal and judicial systems. Over the course of the nineteenth century, the United States moved from a primary- to a tertiary-sector economy. Insofar as a subset of the service economy, knowledge, now dominates economic activity, the United States and the modern world are said to be dominated by a fourth sector, an “information age.”

The proportion and changing role of the primary sector can be seen in other national economies, and the transition from primary to tertiary or fourth-sector dominance has accelerated from centuries to decades. China, with the largest population on Earth, was for millennia an agricultural economy that produced manufactured products through human and animal labor. As of 2022, only about 4 percent of its economy was concentrated in the primary sector. Twenty-seven percent was in industry; 64 percent was in services. The tertiary will grow rapidly, while the second diminishes as a proportion, but not necessarily the wealth, of the country. However, India, with almost one-fifth of its economy in the primary sector, nonetheless, has more than one-third already in the tertiary.

In the United States, much as Britain and Japan, only about 1 percent of the economy comes from the primary sector. Nonetheless, what it produces feeds large portions of the globe and is a significant contributor to national export income. Brazil demonstrates further this course of development. From its colonial beginnings in the sixteenth century until the middle of the twentieth, it was known only for its exports: coffee, sugar, tobacco, and cotton. Toward the end of the twentieth century, it was industrialized. By the first decade of the twentieth century, agriculture comprised but one-twentieth of its economy; industry, hardly one-third; and services, nearly two-thirds.

However, it cannot be assumed that because a country is rich in primary sources, it will invariably develop. Numerous other factors impinge upon growth beyond the primary sector. For example, there must be a consuming public to stimulate production. Enslaved societies cannot have mass production because they do not have a mass of free consumers. In addition, a society of consumers must also have savings from which loans for investment are made. Economies based on a primary sector, unless holding mines of gold and other precious materials, will have more limited savings for investment. Fertile soils and minerals are not evenly distributed over the Earth. Countries with wide plains in temperate climates, such as Argentina, Canada, the United States, and Ukraine, have greater agricultural prospects. Mountainous regions, such as Chile, Montana, and South Africa, are more likely to be rich. The scarcest minerals, known as “rare earth,” are found almost exclusively in China.

In economic development theory, the primary sector gradually declines, although it never becomes entirely negligible and recognizably is of primal importance. Economically, the primary sector is used as a measure or gauge. However, historically, the emergence of a primary sector marks a nascent civilization. Humankind searched out stones as tools and then identified some as tin, iron, or gold. Forged in heat, these metals could become tools, weapons, currency, and adornments. From hunting and gathering, the species identified grains that could be cultivated and animals that could be husbanded, stabilizing food supply and settling a community.

Consequences

The consequences of the primary sector vary by interests. For social survival, they are essential resources. For economic development, they are foundational materials. Ecologically, they are finite. Numerous international research reports now show that humankind has come to dominate exploitation of the Earth’s primary resources to the point that many cannot naturally replenish themselves. Such is the case, among many examples, for fresh water, species of fish, and forest woodlands. Indeed, the primary sources such as or coal that the other sectors require for manufacturing or servicing spew amounts of carbon dioxide into the that threaten the global climate.

Scarcity of resources, whether from consumption or the vagaries of nature, has crucial socioeconomic consequences. Demand determines price, which rises and falls based on the size of demand for the amount of supply. This tidal dynamic is the basis of trade. It is also a perennial cause for war. The contents of the primary sector may appear banal, but their presence or absence determines wealth or misery.

For most of human history, the resources of the primary sector have been a challenge to find, exploit, extract, and control. That challenge has been, in modern times, overwhelmingly met. The challenge for the future is to conserve the primary sector. Primary sources are the host materials of the human species. An epidemic ends when a species devours its hosts. The primary sector is suffering a plague of consumption. The consumption so essential to economic production and development may prove a cancer for planetary survival. Primary resources have always been the essentials of human survival. However, their survival, their continuation, is now vital to the Earth itself. Those who command the secondary and tertiary sectors, alert to this prospect, must modify their procedures so that any sectoral or economic procedure can continue.

Bibliography

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