This document discusses different economic sectors and structures. It identifies three main economic sectors: primary (extractive), secondary (manufacturing), and tertiary (service). It outlines the advantages and disadvantages of each sector. The document also discusses public and private sectors, noting the public sector is government-owned while the private sector aims to generate profit. Privatization and nationalization are explained as changing ownership from public to private or vice versa.

1. ECONOMIC AND LEGAL STRUCTURES Mr. N Farrell
L6 BATCE

2. Objectives:
Identify the different types of business activities -
Primary sector, Secondary sector, Tertiary sectors
Establish the advantages and disadvantages of
each sector
Discuss the various economic sectors – Public and
Private sector organizations

3. Types of economic activity
The are three main types of economic activity
classifications in the Caribbean:
The primary sector
The secondary sector
The tertiary sector

4. The Primary Sector
(The extractive industry)
This sector involves the extraction of raw materials to be
used to manufacture products
A rolling pin is made of wood. We get wood from trees.
Trees are extracted from the forest
The extraction of the tree to make the wood is based in
the extractive industry
Due to the fact it is the first or PRIMARY STEP in the
manufacture of the product it is known as the primary
sector

5. Advantages of reliance on the primary
sector:
• Supplies raw materials for conversion in the other
industries
• A comparative advantage is gained in the country
extracting compared to the country manufacturing
• Creation of jobs as jobs are needed to extract the raw
materials
• Generation of export revenues (foreign exchange)

6. Disadvantages of reliance on the
primary sector:
• Depletion of natural resources (through over-extraction)
• If the demand for the finished product decreases, then
demand for the raw material in the extractive industry will
also decrease

7. Click on the following link:
https://www.youtube.com/watch?v=5aZlJtaY2WQ
Look at the video above and determine how it is
closely related to how humans deplete our own
natural resources environment

8. The Secondary Sector
(The manufacturing industry)
This sector involves the manufacture or conversion of
raw materials to finished products available for
consumers to use
(Factors of production)
(manufacturing) (finished goods)
This sector involves manufacturing and construction

9. Advantages of being in the secondary
sector:
• Reduction in the importation of goods causing a better
use of foreign exchange
• Exported secondary sector products are foreign exchange
earners
• Primary products can be used make many secondary
products
• Increased investment in the primary sector
• Improved GDP

10. Disadvantages of being in the
secondary sector:
• The profit motive of manufacturing firms will deplete
primary sector raw materials
• Multinational companies may sends away their profits to
their home countries
• Importation of raw materials means foreign exchange
leaving the host country

11. The Tertiary Sector
(The service industry)
No production is done in this sector as it provides services
Tertiary sector activities include:
Tourism (Drastic reduction due to the pandemic)
Telecommunications (Drastic increase due to the pandemic)
Healthcare (Grater reliance on this sector in the pandemic)
Education
Management
Others

12. The Tertiary Sector Advantages
• Generates foreign exchange as in the case of
tourism
• Improves job creation and training
• Primary sector reliance is low thus there is very
little depletion of natural resource/raw materials
• Less pollution compared to the primary and
secondary sector

13. The Tertiary Sector Disadvantages
• May not be as sustainable as the primary and
secondary sector
• There may be high training costs

14. The Public and Private Sector
The structure of these sectors are based on the type of
economic activity they perform and are determined the
answers to these following questions:
What to produce?
How to produce?
For whom to produce?
The private sector consists of businesses that are owned by
individuals or groups of individuals with the main aim of
making profits

15. The Public and Private Sector
What to produce; How to produce; For whom to produce?
Government can influence these questions, however the type
of organization is based on its legal structure which determines
the following:
1. How profits are shared
2. Ease of formation
3. Funding
4. Who shares the legal liabilities
5. Continuity of existence
6. The firm’s tax organization

16. The Public and Private Sector
The Public Sector:
The public sector consists of businesses that are owned and
controlled by the government. The main aim is not to attain
profits but to benefit society.

17. The Public and Private Sector
The Private Sector:
The private sector consists of businesses that are owned by
individuals or groups of individuals with the main aim of
making profits

18. Privatisation
Privatisation is the change of ownership of a firm from
state (government) to private individuals.
Advantages of Privitaisation:
To generate much-needed income to fund projects or take off budget
shortfall
To improve efficiency in these businesses which may benefit
consumers
It can no longer afford to finance and operate these entities
To share ownership of resources and encourage competition.

19. Privatisation
Privatisation is the change of ownership of a firm from
state (government) to private individuals.
Disadvantages of Privitaisation:
• May cause private monopolies to develop
• Income generated from the sale of nationalized industries is a one-
off receipt and cannot be repeated if future needs arise
• If private firms are not regulated then there might be degradation
of the environment through overproduction
• Because profit is the motive, if profits are not made the business
may close down

20. Nationalisation
Government acquisition of ownership mainly though
majority share purchase of a private business
Advantages of Nationalisation:
Better control of resources in that particular business/ industry.
It can generate revenue for public use
It can save a struggling industry
Reduces exploitation of workers in an industry

21. Nationalisation
Government acquisition of ownership mainly though
majority share purchase of a private business
Disadvantages of Nationalisation:
Low productivity and inefficiency
Corruption and mismanagement
Political interference