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Stages of Production Production within an economy can be divided into three main stages: primary, secondary and tertiary. Primary Production Also known as the extractive industries Primary production involves the extraction of raw materials (e.g. farming, forestry, fishing, and mining). There is little value added in primary production. The aim is usually to produce the highest quantity at lowest cost to a satisfactory standard. Secondary Production Also known as manufacturing industries Secondary production involves transforming raw materials into goods. There are two main kinds of goods:- Consumer goods – e.g. washing machines, DVD players. As the name implies, these are used by consumers Industrial / capital goods – e.g. plant and machinery, complex information systems. Industrial and capital goods are used by businesses themselves during the production process. In the secondary production sector, value is “added” to the raw material inputs e.g. foodstuffs are transformed into ready meals for sale in supermarkets; metals, fabrics, and plastics are transformed into motor vehicles. There are many different industry sectors in secondary production. For example: Electronic instruments House-building Car building Tertiary Production Also known as the service industries Tertiary production is associated with the provision of services (an intangible product). As with the secondary sector, there are many tertiary production markets. Good examples include: Hotels Private healthcare and education Accountants Tourism |