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Comparing Different Sectors

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Comparing Different Sectors - Lesson Summary

The primary, secondary and tertiary sectors of the economy involve the production of a large number of goods and services. Every product or service has a value.

The final values of goods are used to calculate the production in a sector. The sum of the total production in the three sectors in a year for a country gives the gross domestic product or GDP for that country in that year.

GDP is a globally accepted indicator of the size and health of a country’s economy. The contribution of different sectors to the GDP of a country depends on the state of development of that country’s economy. An economy starts developing based on natural resources and products, so at the initial stage of development, the primary sector is the biggest contributor to GDP.

In a developing economy, industrialisation creates fresh job opportunities and people use more and more manufactured goods. Here the secondary sector becomes the biggest contributor to GDP. In developed countries, people can afford and demand more services which leads to a rapid growth in the tertiary sector. Thus, the tertiary sector is the biggest contributor to the GDP. The tertiary sector has become the largest sector in India’s economy.

The tertiary sector has expanded due to:
  • The government’s initiatives for the expansion of essential services
  • The development of agriculture and industries support services
  • The rapid development and expansion of communication and information services 

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