The Origin and Major Features of the Basic Industry

Basic Industry

The basic industry is the sector of the economy that produces the raw materials and intermediate goods used in the manufacturing of finished goods. The basic industry is often referred to as the upstream sector of the economy, as its products are used as inputs in the manufacturing of finished goods downstream. A career at basic industry is going to stand you in good stead, as basic industries play an essential role in the provision of raw materials to other industries.

The manufacturing and service sectors build from the foundation they provide. Without the basic industry, there would be no finished goods to produce or service to provide.

The basic industry is typically composed of extractive industries (e.g. mining, forestry, and farming), primary processing industries (e.g. refining and smelting), and manufacturing industries that produce intermediate goods (e.g. steel and chemicals).

Basic Industry important for the functioning of Economy

The basic industries are the key to the functioning of any economy. They are the industries that provide the essential goods and services that are necessary for the functioning of society. Without them, the economy would grind to a halt.

Any country that exports a good amount of raw material produced by its basic industry will benefit from a good cash flow and a flourishing economy.

Basic industries promote foreign currency inflows and those companies that export, earn money, and are able to invest in job creation and development. Outside wealth comes to a country through basic industries. Basic industries are able to produce a wide range of items.

Grain is a typical example in the United States. A lot of the grain farmed in the United States is for export purposes only, and not for domestic consumption. The grain exports to those countries that do not have domestic manufacturing means.

A number of these nations create commodities that arrive in the United States. Basic industries contribute quite a bit to a country’s economy. Demand for goods and services from other countries has an effect on the global economy.

Common Categories of Basic Industries

The most common categories of basic industries are, among others, the paper and pulp industry, agriculture, chemical, mining, oil and gas, and steel industry. In the primary sector of an economy, activities occur by using natural resources such as agriculture and forestry, as mentioned.

These basic or primary industries form the base for all other products. The basic or primary sector is dedicated to the extraction of natural resources from nature. The primary sector has a higher proportion of uneducated workers. Farming as an example is the planting and growing of crops which will be harvested to sell.

The basic industries sector makes use of natural resources. It’s in contrast to the secondary sector, where manufacture goods produces. You can say that the primary sector is more important in less developed countries, and less important in industrial countries.

The economy starts with primary or basic industries. You can imagine that sudden shortages will have a detrimental effect on the rest of the economy. Look how often the world tells of shortages in oil, and this shoots petrol prices up. Businesses then battle with high production costs. Shortages in products and cash cause people to hold on to their cash, and the sudden slowing of cash flow can be the start of an economic crash.

The Origin of Basic Industry

The Industrial Revolution brought in new manufacturing processes in Great Britain, the United States, and Europe sometime in the early 1800s. Hand production methods progressed to the use of machines, steam- and water power increased, and there was the introduction of a mechanized factory system. This meant that the output of production greatly increased.

The basic industry saw a major turning point in history and certainly changed the way people lived their lives. The exact origin of the basic industry is still debatable. But historians hold that it began in Britain in the late 1700s. But not fully feel till the 1830s. Mechanized textile production spread from Great Britain to the United States and Europe, with centers of textiles, coal, and iron starting to emerge.

The basic industry has undergone a number of changes in recent years. One of the most significant changes has been the increase in automation and the use of technology in the production of raw materials and intermediate goods. This has led to a decrease in the number of jobs in the basic industry, as many jobs have been replaced by machines.

Despite the changes that have occurred in the basic industry, it remains a critical part of the economy and will continue to be so in the years to come. Let us now talk about the various features of basic industry.

Basic industries produce raw materials which supply raw materials to other industries for manufacturing goods and services. Examples of basic industries are agriculture wood, iron, steel, oil, chemical, etc. That means without basic industries you can’t grow your industry and economy. Several factors affect the industry including capital investment, labor supply, and technology.

Features of Basic Industry

There are a few basic features across all the basic industries –

  • The job is of a physical nature, and you will be doing a lot of active work – bending, stretching, and walking.
  • You may need advanced training. A common feature of basic industry careers is that you are highly qualified and trained. The job may even require you to have a degree in engineering or have some technical field training.
  • Concern for the environment. You have to think about your response to the environment, Unfortunately, these industries generate by-products that can harm the environment, and the byproducts might even be hazardous to your health.
  • You can say that one of the main features of basic industries is the extraction and production of raw materials such as forestry, mining, farming, and fishing. It is to be noted that forestry and fishing comprise a much larger percentage of GDP in sub-Saharan Africa when compared with countries such as North America where it is less than 1% of GDP.

Basic industries have certainly shaped the societies we live in today, bringing about changes in technology and the social structures of societies and in manufacturing. The industrial revolution in Britain brought about many changes – a time when rural societies became industrial.

Specialized machinery leads to mass production

Manufacturing was even sometimes performed in people’s homes, making use of a mix of rough hand tools or manual machines. Industrialization saw a shift to specialized machinery and mass production.

Mass production saw animal power replaces with steam power and with the invention of new machinery. Labor standards began improving, and today the huge technological advancements in countries have made it possible to engage fewer human resources in basic industries and to look at mechanical means.

To Wrap Things Up

The basic industries are the foundation of an economy and play a vital role in its development. They provide the raw materials and energy that are essential for the growth of other sectors. They also create employment opportunities and generate income. The basic industries are therefore important for the overall development of an economy. There is always going to be a need for qualified workers in this industry.


Please enter your comment!
Please enter your name here