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Categories of industry


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Categories of industry

  1. 1. C O Brien Chanel College
  2. 2. Learning TargetsWhat are the factors of production?Primary, Secondary and Tertiary sectorsChanges and Trends in these sectors C O Brien Chanel College
  3. 3. You can’t have it all! C O Brien Chanel College
  4. 4. Factors of production Land Labour Capital Enterprise C O Brien Chanel College
  5. 5. Land• Anything provided bynature that helps usproduce G&S• E.G. Sea Soil Gas• Payment: Rent C O Brien Chanel College
  6. 6. Labour• Any human effortthat helps to produceG&S• E.G. Doctor Accountant Factory worker• Payment: Wages C O Brien Chanel College
  7. 7. Capital• Anything that ismade by humans thatis used to helpproduce G&S• E.G. Machinery Computers• Payment: Interest C O Brien Chanel College
  8. 8. Enterprise• Organises land labourand capital by setting up abusiness and bears therisk of success or failure• E.G. Entrepreneur• Payment: Profits C O Brien Chanel College
  9. 9. The Primary Sector Also known as the ‘Extractive Industry’ Based on natural resources Non- Renewable: Limited supply. Theymust be used sparinglye.g. Oil / Gas Renewable: If carefully managed theycan last indefinitely e.g. Solar power/crops/ Wind power C O Brien Chanel College
  10. 10. AgricultureFacts: It accounts for 7.7% employment in Ireland It makes up 10.5% of Ireland’s totalexports 80% of agriculture produce is exported C O Brien Chanel College
  11. 11. Composition of Employment in the Agri-Food sector, 2011 C O Brien Chanel College
  12. 12. Problems: Decline in EU Grants/payments:Instead of receiving many different grants andpayments farmers just receive one single farmpayment regardless of how much output isproduced in a year Consumer confidence:Has declined in recent years due to excessiveuse of pesticides/ development of diseases e.g.Mad cow disease. We need to protect ‘Green’image. C O Brien Chanel College
  13. 13.  Weather:The IFA estimated that the bad weatherthis year cost farmers about €160m inextra animal farm feed and lost output. Competition:Small farmers find it difficult to remaincompetitive and need to ceaseopportunities of taking over new farms ordiversifying their product range. C O Brien Chanel College
  14. 14. Trends: Beef & milk are increasing in price as demandis increasing due global population growth Continued growth in organic food production.Positive effect on Ireland’s ‘Green’ image Food product traceability is necessary toreassure customers of quality C O Brien Chanel College
  15. 15. Fishing Small industry in Ireland contributes to €700million annually to national income Provides employment for coastalcommunities, 11,000 people. As part of the EU other EU countries fish here– Increased competition Intro of quotas limits amount that can becaught C O Brien Chanel College
  16. 16. Problems/ Trends: Restrictions: EU has imposed fishingquotas on the size of fish catches whichrestricts development in the industry Size of boats: Most of the fishing fleet inIreland is comprised of small boats. They arenot equipped to travel long distances to findbig catches Overfishing: Stocks of some fish speciesis very low C O Brien Chanel College
  17. 17. Forestry Small industry in Ireland Ideal climate conditions for the production oftrees Grants provided to farmers to develop forests Slow return on investment C O Brien Chanel College
  18. 18. Problems/ Trends Slow return on investment Grants available to farmers to plant forestsCoillte, state company own and run most ofthe forests in Ireland C O Brien Chanel College
  19. 19. The Secondary Sector Construction• Involved in building houses factories,offices & infrastructure e.g. roads• Uses a high % of home produced rawmaterials• Is labour intensive – creates employment 2007 Employment: 300,000 Output = €40 billion. 2011 Employment: 100,000 Output = €10 billion. C O Brien Chanel College
  20. 20. Problems/ Trends:• Economic fluctuations: Low economic activityresulting in decrease in demand for constructionindustry – decrease in employment• Regulations: New laws have been introducedwhich places increased responsibility on theconstruction industry with regards to their builds C O Brien Chanel College
  21. 21. C O Brien Chanel College
  22. 22. Manufacturing• Converts raw materials into finished goods• Important industry creating direct and indirect employment• E.G. Manufacturing industries:1. Agri – businesses2. TNCs3. Indigenous businesses College C O Brien Chanel
  23. 23. Problems/ Trends:• Employment: Decreasing significantly inthis industry. Cheaper labour abroad.• Knowledge economy: Increased focus onmarketing Ireland as a knowledge basedhighly technical workforce to encourageforeign investment• New Technology: Move towards ICT androbotics for production C O Brien Chanel College
  24. 24. 1. Agribusiness• Supply products to farmers & manufacture farmproduce into saleable productsProblems• Competition: These businesses are small.Difficult to compete with larger foreign companies• R&D: Low investment in research anddevelopment. Lack of new product development C O Brien Chanel College
  25. 25. Trends:•.Mergers: Agribusinesses have mergedwhich allows them to compete moreeffectively. e.g. Glanbia C O Brien Chanel College
  26. 26. TNCs:• Multinational company• Head office in one country but operate in anumber of countries (subsidiary)• Employs over 100,000 in Ireland• IDA responsible for attracting TNCs to Ireland C O Brien Chanel College
  27. 27. What attracts TNCs to Ireland? Educated workforce Location within the EU – Access to EUmarkets Grants provided by IDA Low corporation tax High levels of productivity achieved by Irishbusinesses C O Brien Chanel College
  28. 28. Benefits:• Employment: Large amount of jobcreation due to establishment in Ireland• Corporation Tax: Contribute to Nationalbudget as they pay 12.5% tax on profits• Training: Employees get world classtraining and skill development• Spin off industries: These are createdlocally which contributes to indirectemployment C O Brien Chanel College
  29. 29. Problems:•Loyalty: As they are developed in another country ifthe economy is doing badly they have no issue withleaving and moving their subsidiary to anothercountry.•Profits: The profits made by the TNC are sent backto the headquarters.•Closure: As an economy we are over reliant onTNCs. If they close it has a huge negative impact onlocal communities as jobs are lost and spin offindustries lose business. Chanel College C O Brien
  30. 30. Indigenous Firms:•Businesses that are Irish owned and produce G&Sin Ireland•Enterprise Ireland* government agency thatsupports and encourages development of Irishbusinesses•Most indigenous firms are SMEs – Small mediumEnterprises C O Brien Chanel College
  31. 31. • They provide assistance and capital to firms at start up stage• They provide advice & support to start up businesses• They assist firms with product and process development• Support and encourage firms to export their G&S C O Brien Chanel College
  32. 32. Benefits:•Loyalty: Irish firms are loyal, unlikely to relocatesomewhere else. E.G. Group opening new science &innovation centre in Kildare. This will create 900jobs.•Support: Purchase raw materials and suppliesfrom local businesses•Profits: Reinvested back into Ireland & contributeto revenue for the government C O Brien Chanel College
  33. 33. Problems:•Export market: Only a small no. of Irish brands arerecognised abroad reducing their selling power inforeign markets•Wages: High wages expectations in Ireland result insome manufacturing firms to locate abroad to avail oflower costs of production•R&D: Not enough investment compared tocompetitors C O Brien Chanel College
  34. 34. Trends:• World class manufacturing: Has developedin Ireland as valuable training is provided.• R&D: Investment is growing. Required forgrowth and expansion of product range ofbusiness• Technology: Big emphasis on technologicalbased industries in the future C O Brien Chanel College
  35. 35. Tertiary SectorThe largest and fastest growing sector in the Irish economy.Examples include:Financial services - Medical services - Transport services - Leisure services.Most service industries are labour-intensive and this has a very positive impact on job creation.Improvements in IT have also led to growth.Tourism is a significant service sector in Ireland. C O Brien Chanel College
  36. 36. Trends:• ICT: Increase in investment in broadband andsocial media• Telecentres: Opened to deal with after salesservices• Childcare: Increase in childcare services in linewith population growth C O Brien Chanel College
  37. 37. Question:Explain using examples the impact of TNCs in Ireland.(20 Marks)Solution:1.Explain acronym. Define TNC2.Name: Employment Explain: Explain Name: Spin off industries Link E.G.S Explain: Name: Government Revenue Explain Name: WCM – Training Explain: C O Brien Chanel College