In this blog, we are going to learn about the classification of industries. Let us first understand what is an Industrial System. An industrial system consists of inputs, processes, and outputs. The inputs are the raw materials, labor, and costs of land, transport, power, and other infrastructure. The processes include a wide range of activities that convert the raw material into finished products.
The outputs are the end product and the income earned from it. In the case of the textile industry, the inputs may be cotton, human labor, factory, and transport cost. The processes include ginning, spinning, weaving, dyeing, and printing. The output is the shirt you wear.
Industrial regions emerge when a number of industries locate close to each other and share the benefits of their closeness. Major industrial regions of the world are eastern North America, western and central Europe, eastern Europe, and eastern Asia. Major industrial regions tend to be located in the temperate areas, near seaports, and especially near coalfields.
India has several industrial regions like the Mumbai-Pune cluster, Bangalore-Tamil Nadu region, the Hugli region, the Ahmedabad-Baroda region, Chottanagpur industrial belt, Vishakhapatnam-Guntur belt, Gurgaon-Delhi-Meerut region, and the Kollam-Thiruvanathapuram industrial cluster.
The industry refers to economic activity that is concerned with the production of goods, extraction of minerals, or the provision of services. Thus we have the iron and steel industry (production of goods), coal mining industry (extraction of coal), and tourism industry (service provider).
CLASSIFICATION OF INDUSTRIES
Industries can be classified on the basis of raw materials, size, and ownership. Let us understand the classification of industries one by one.
Raw Materials: Industries may be agro-based, mineral-based, marine-based, and forest-based depending on the type of raw materials they use.
Agro-based industries use plant and animal-based products as their raw materials. Food processing, vegetable oil, cotton textile, dairy products, and leather industries are examples of agro-based industries.
Mineral-based industries are primary industries that use mineral ores as their raw materials. The products of these industries feed other industries. Iron made from iron ore is the product of mineral-based industry. This is used as raw material for the manufacture of a number of other products, such as heavy machinery, building materials, and railway coaches.
Marine-based industries use products from the sea and oceans as raw materials. Industries processing seafood or manufacturing fish oil are some examples.
Forest-based industries utilize forest produce as raw materials. The industries associated with forests are pulp and paper, pharmaceuticals, furniture, and buildings.
Size: It refers to the amount of capital invested, the number of people employed, and the volume of production. Classification of industries has also been done based on size, industries can be classified into small-scale and large-scale industries.
Small scale industries use a lesser amount of capital and technology as compared to large scale industries that produce large volumes of products. Silk weaving and food processing industries are small-scale industries. Cottage or household industries are a type of small-scale industry where the products are manufactured by hand, by the artisans. Basket weaving, pottery, and other handicrafts are examples of cottage industry.
Large Scale Industries: Investment of capital is higher and the technology used is superior in large-scale industries. Production of automobiles and heavy machinery are large-scale industries.
Ownership: Industries can be classified into the private sector, state-owned or public sector, joint sector, and cooperative sector.
- Private-sector industries are owned and operated by individuals or a group of individuals.
- The public sector industries are owned and operated by the government, such as Hindustan Aeronautics Limited and Steel Authority of India Limited.
- Joint sector industries are owned and operated by the state and individuals or a group of individuals. Maruti Udyog Limited is an example of a joint sector industry.
- Co-operative sector industries are owned and operated by the producers or suppliers of raw materials, workers, or both. Anand Milk Union Limited and Sudha Dairy are success stories of a cooperative venture.
FACTORS AFFECTING LOCATION OF INDUSTRIES
The factors affecting the location of industries are the availability of raw material, land, water, labor, power, capital, transport, and market. Industries are situated where some or all of these factors are easily available. Sometimes, the government provides incentives like subsidized power, lower transport cost, and other infrastructure so that industries may be located in backward areas. Industrialization often leads to the development and growth of towns and cities.