Three sectors: primary, secondary, tertiary
Businesses are classified by what they do: the primary sector extracts natural resources (farming, fishing, mining); the secondary sector turns raw materials into goods (manufacturing, construction); the tertiary sector provides services (banking, retail, transport, healthcare). They form a supply chain — primary supplies secondary, which makes products tertiary sells to consumers. Note: 0450 tests only these three; the quaternary sector is not in the syllabus.
Sectors shift as an economy develops
As an economy develops, the primary and secondary sectors usually shrink as a SHARE of output and employment while the tertiary sector grows to dominate. Causes: rising incomes (people spend proportionally more on services); mechanisation and technology (machines replace farm and factory workers); globalisation (manufacturing moves to lower-cost countries); and changing government policy. In data questions, identify the trend AND explain why it happened.
Private sector, public sector, mixed economy
The private sector is owned by individuals or shareholders (sole traders, partnerships, Ltd, plc), usually aiming for profit. The public sector is owned and run by the government to provide services (state schools, hospitals, state railways), funded by taxes. Almost every economy is mixed, combining both. Beware: a public limited company (plc) is PRIVATE sector — public just means its shares are publicly traded, not that the government owns it.
Drawn from real examiner reports.
Public sector ≠ public limited company
The public sector is owned and run by the government (state schools, government hospitals). A public limited company (plc) is PRIVATELY owned, with shares traded on a stock exchange — despite the word public, it is private sector. Calling a plc public sector, or a government hospital a company, scores zero on the classification mark.
Jun 2022 P11 Q2(a), Nov 2022 P13 Q2(a), Nov 2023 P12 Q3(a)
Primary sector ≠ public sector
Two separate systems are being mixed up. Primary/secondary/tertiary classifies WHAT a business does; private/public classifies WHO owns it. A primary-sector firm (extracting resources) may be privately owned or state-owned — the two labels are independent. When a question asks you to identify the sector, check whether it means type of activity or ownership before you answer.
Nov 2022 P13 Q1(a)
Quoting data is not analysis
In sector data questions, quoting the figures (the primary sector fell from 25% to 12%) earns only the descriptive mark. The analysis marks need the REASON — e.g. mechanisation cut the farm workforce, and rising incomes shifted spending to services. Do not just restate numbers; link the trend to a cause and to an outcome such as fewer jobs.
Nov 2023 P12 Q3(d)
Tertiary sector ≠ public sector
Tertiary means services — it says nothing about ownership. A tertiary business can be private sector (a retailer, a bank) or public sector (a state hospital, a government bus service). Do not assume services are government-run, or that the public sector is all tertiary; a state-owned mine is public sector but primary. Match the classification the question actually asks for.
Falling share is not falling output
A declining SHARE of the primary sector does not mean the sector is shrinking in absolute terms. As an economy develops the primary sector can still grow in output while its share of total output or employment falls, because the other sectors grow faster. Saying the primary sector is disappearing because its percentage fell misreads the data.
No quaternary sector in 0450
Some economies name a quaternary sector (knowledge and information services such as IT consulting and research), but 0450 tests only primary, secondary and tertiary. Writing quaternary as a sector of the economy earns no credit here — classify service-based knowledge work as tertiary. Stick to the three sectors the syllabus defines.
Match the command word
Answer to the command word. Define/State (2 marks) = a precise two-element answer. Explain = a developed reason. Analyse = a chain (point, mechanism, then consequence). Evaluate/Justify = weigh both sides and reach a judgement. Analyse is not evaluate.
Score AO4 with a supported judgement
On a 6-mark Do you think...? Justify item, AO4 needs a supported judgement: a decision, a reason it outweighs the other side, and why the alternative is weaker — applied to the named business or country. Listing features of both sides with no decision stays out of the top band.
Chain your analysis to a consequence
Analysis needs a chain: point, mechanism, consequence. A bare point (the tertiary sector grew) stalls at knowledge marks; add the mechanism and outcome — rising incomes shift spending to services, so service jobs grow. Use explicit language: so..., leading to...
Every business can be placed in one of three sectors based on what it does:
| Sector | Activity | Examples |
|---|---|---|
| Primary | Extracts or harvests natural resources directly | Farming, fishing, mining, forestry, oil drilling |
| Secondary | Converts raw materials into goods (manufacturing and construction) | Car assembly, food processing, steel making, house building |
| Tertiary | Provides services to other businesses and consumers | Banking, retail, tourism, transport, education, healthcare |
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