1. CHAPTER # 1 : INTRODUCTION TO INDUSTRIALISATION INSTRUCTOR: MR. MANZOOR AHMAD DEPARTMENT OF ECONOMICS UNIVERSITY OF SWABI Lecture # 3

2. Types of Industries 1. Cottage Industry 2. Small Scale Industry 3. Private Scale Industry 4. Large Scale Industry 5. Public Sector Industry 6. Joint Sector Industry 3. 1. Cottage Industry An industry where the creation of products and services is home-based, rather than factory-based. A Cottage Industry is defined as a service performed or product made in ones own home for remuneration. These are the industries in which not much capital or space is required. 4. Examples of Cottage Industry Handicraft Wood carvings 5. Examples of Cottage Industry Brocades Glazed potteries 6. 2. Small Scale Industry An industry is defined as small scale if it employs 5 to 9 workers which may include proprietor and his family members or hired labor on wages An industry is defined as small scale if it employs 5 to 9 workers which may include proprietor and his family members or hired labor on wages. Note: The definition of small scale industries differs from country to country. All the definitions are based upon certain factors like number of persons employed, amount of investments, power, inputs, productions/turnover, locations, technology etc. 7. 2. Small Scale Industry For example in U.S.A, U.K and Pakistan, employment is taken as a basis for defining small scale industry. In India, Srilanka, Indonesia, and Malaysia investment is taken as a basis for defining small scale industry. In Japan, Korea and Philippines investment and employment are taken as a basis for defining small scale industry. In China Turnover is taken as a basis for defining small scale industry. 8. 2. Small Scale Industry A small scale industry is defined as follows in various countries: 1. USA: No official definition exists but generally taken to mean less than 100 employees. 2. UK: A manufacturing unit employing less than 200 employees. 3. Japan: In manufacturing unit the investment limit is 100 million Yen and employing below 300 persons. 4. Korea: In manufacturing unit the investment limit is 500 million Won and employing more than five persons but less than 300. 9. 2. Small Scale Industry 5. Malaysia: In manufacturing unit the investment limit is less than R.M 250.000. 6. Philippines: Investment between P1,00000 and P1.0 million and employing workers between 5 to 99 persons. 7. Indonesia: The small scale unit is one which employs an investment in plant and machinery not exceeding Rp 150 million. 8. Srilanka: Investment limit below Rs. 2 lacks. 9. Pakistan: An industry is defined as small scale if it employs 5 to 9 workers . 10. Examples: Small Scale Industry Poultry Farm Dairy Farm 11. Examples: Small Scale Industry Honey Making Carpets Making 12. Examples: Small Scale Industry Sports Goods Fish Farm 13. Examples of Small Scale Industry Naswar Production 14. 3. Private Sector Industry It is a kind of industry which is set up by few private individuals with their own capital. They manufacture such commodities, which according to them, will be readily accepted by the society and through which they will get maximum profit. 15. 4. Large Scale Industry Large scale industries are industries that employ a lot of people. For example, engineering companies are large scale companies. These industries need large capital, machine and space. All the heavy industries of Pakistan like the Iron and steel industry, textile industry, automobile manufacturing industry fall under the large scale industrial arena. However in recent years due to the IT boom and the huge amount of revenue generated by it the IT industry can also be included within the jurisdiction of the large scale industrial sector. 16. Examples: Large Scale Industry Automobile industry 17. Examples: Large Scale Industry Steel Mills 18. 6. Public Sector Industry Those industry which is run and controlled by government of a country. The basic objective of this type of industry is to enhance and protect the welfare of the society. 19. 6. Joint Sector Industry It is a type of industry in which capital and controlled is neither exclusively in the hands of the state nor that of the private individuals , but in both the state and the private individuals combine together. In such an industry usually the share capital and investment of state is more than that of the private individuals 20. Characteristics of Modern Industry 1. Big industries: Modern industries are usually quite big in which a large number of people are employed. 21. Characteristics of Modern Industry 2. Trade union: Trade union is another feature of our modern industry. Those who work in an industry usually organize themselves into trade union. These organized people then try to bargain with the management for better working conditions, better emoluments and for getting other facilities. 22. Characteristics of Modern Industry 3. Impersonal Character: In modern industry worker has no close association with the goods which he is producing. It is primarily because one who starts work does not finish it. It is to pass through various stages before it completely becomes a finish goods. The top bosses meet together and have personal contacts only and do not know much about workers. 23. Characteristics of Modern Industry 4. Need for Money: A good modern industry cannot run without finances. In the past a craftsman could manage with little money, but today heavy finances and amounts are needed to keep the industry running. 24. Characteristics of Modern Industry 5. Division of labor: In the past there used to be no division of labor in the industry. But today there is clear division of labor. Each person is required to do only a particular type of job. 25. Characteristics of Modern Industry 6. Desire for Monopoly: Another feature is that every industry wants to have less competition and more monopoly conditions. But in spite of this desire, almost every industry is faced with competitions from other industries. 26. Characteristics of Modern Industry 7. Mechanization: In modern Industry, industry is typical for mechanization, i.e., usage of machines, e.g. tractors, trucks, bulldozer, excavator, etc. 27. Characteristics of Modern Industry 8. Automation: Usage of robots 28. Characteristics of Modern Industry 9. Computer usage: Another feature of modern industry is use of computer. 29. Types of industry according to the position of industry to needed raw materials 1. Primary Industry: Primary industries are those that harvest or extract raw material from nature, such as agriculture, oil and gas extraction, logging and forestry, mining, fishing, and trapping. Industry, such as mining, agriculture, or forestry, that is concerned with obtaining or providing natural raw materials for conversion into commodities and products for the consumer: 30. Examples: Primary Industry 31. Types of industry according to the position of industry to needed raw materials 2. Secondary industry: This sector generally takes the output of the primary sector and manufactures finished goods. Unlike a primary industry, which collects and produces raw materials for manufacture, a secondary industry makes products that are more likely to be consumed by individuals. Examples of secondary industry divisions include automobile manufacturing, steel production and telecommunications. 32. Examples: Secondary industry 33. Types of industry according to the position of industry to needed raw materials 3. Tertiary Industry: Also called Service sector The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainments. It also includes: repairs, shops, restaurants, accommodation, police, schools, etc. 34. Examples: Tertiary Industry