CHAPTER 18

CATEGORIES OF INDUSTRY

UNIT 6

Factors of Production

Land = Anything produced by nature used in the production of wealth. Payment = Rent

Labour = the human effort involved in the production of wealth. Payment = wages.

Capital= anything manmade used in the production of wealth. Payment = interest.

Enterprise = having the initiative and taking the risk to produce wealth. Payment = profit or loss.

CATEGORIES OF INDUSTRY (PRIMARY, SECONDARY, TERTIARY)

PRIMARY SECTOR

Extractive Industries (agriculture, fishing, forestry, mining, quarrying, renewable resources

Agriculture

Importance:

  • Suitable climate
  • Employs 5%
  • ‘green image’
  • Subsidised by CAP brings money in (chapter 24)

Problems:

  • Overproduction has led to ‘decoupling’ and ‘single farm payment’ regardless of production.
  • Small unviable. Many getting out
  • Weather dependent
  • Diseases and growth promoters damage image

New developments:

  • Food prices increasing:
  • Off farm incomes
  • Biofuels
  • Food traceability
  • Non farming enterprises (horse riding, open farms, b and b)

Fishing

Points:

  • Ideal situation but small fleet
  • EU trawlers
  • Over-fishing and Quotas
  • Fish farm and shell fish exports
  • Inland fishing and fears of pollution

Forestry

Points:

  • Ideal conditions
  • Acreage small but growing (Coillte)
  • Tax concessions and grants

Mining and Quarrying

Points:

  • Lead and Zinc in Navan, Lisheen and Galmoy (all closing soon)
  • Ballinaboy in Mayo, natural gas
  • Pipeline network in place (Bord Gáis)
  • Quarrying for construction of buildings and roads.
  • Peat (Bord na Móna)
  • Environmental risks

SECONDARY SECTOR (Construction, Manufacturing and Agribusiness)

Construction

Points:

  • Bursting of Property Bubble
  • Materials made at home
  • Immigration
  • Sustainable development

Manufacturing

  • High tech
  • Foreign owned
  • Spin off industries
  • Risk of going to low cost countries
  • Importance of education.

Agribusiness

  • Supplying farmers (fertilizer as well as processing farm produce)
  • Successful both at home and abroad (Kerry Group)
  • Power of supermarket multiples
  • Co-ops have become PLCs

Transnational Corporations (Multinationals)

Have a head office in one country but produce in several (Ford)

Advantages:

  • Jobs
  • Local economy benefits (more money around)
  • Spin-offs
  • World class training for staff attracts other industries to Ireland
  • Improved Balance of Payments

Problems:

  • Dependency a problem when they close
  • Not rooted in Ireland
  • Repatriate profits
  • Huge power

Why they set up in Ireland:

  • Grants and tax concessions
  • IDA
  • Low Corporation Profit Tax
  • English
  • Educated workforce
  • Good industrial relations

Indigenous Firms

Irish based and Irish owned. Enterprise Ireland helps with grants and tax concessions, advice and support, finance for feasibility studies, venture capital.

Advantages:

  • Loyal
  • Support local community
  • Foster entrepreneurship
  • Profits stay at home

Problems:

  • Small
  • Dependent on multinationals
  • Wages too high
  • Little spent on R and D

TERTIARY SECTOR

Service Industries (banking, insurance, hotels, transport, telecommunications)

State sponsored bodies (IDA, Enterprise Ireland, HSE etc)

Trends:

  • Getting bigger relative to the other sectors.
  • ICT very big
  • Leisure and entertainment bigger
  • Irish banks have expanded business abroad
  • E Learning
  • Childcare