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Classification of Industries

Classification of Industries

The general difference between one industry and other measured according to the nature of the product, number of employees, value of the capital involved, quality of employees, wage rate, value addition of the product and nature of raw materials.

Numerous classifications are available, each quite different from another. One emphasized on raw materials, another on product and even on transport cost.

The Weberian model introduced an industrial classification based on raw materials. According to his model, industries may be sub-divided into following categories –

I. The industries based on ubiquitous raw material: This type of industries use raw materials available everywhere, e.g. air, water, soil, etc.
II. The industries based on localized raw material: These industries use raw materials, confined within some selected region, e.g. coal, petroleum, iron ore, etc.

These industries are again sub-divided, according to weight loss ratio or material index:

A. Pure raw material based industries-The industries using non-weight losing raw materials fall within this category. Cotton textile industry, leather industry fall within this category.
B. Impure raw materials based industries-The industries use weight losing raw materials are included in this division. Aluminium industry, iron and steel industry, sugar industry, heavy chemical industries all belong to this type.

III. The industries based on light-weight, valuables: The sophisticated modern industries, adopting latest technology, generally, use intricate, fine components fall under this category e.g. electronics, electricals, watch, television etc.

According to the weight of the raw material and finished product, industries are also divided into two broad types:

I. Heavy industries – The iron and steel, aluminium, heavy chemical, textile, petro-refineries etc. are in this type.
II. Light industries – The electronics, chemical, machine tool industries are included in this type.

Some of the industries are regarded as basic industries, others are ancillary industries. Some produces consumer goods, while others produce capital goods and construction materials.

According to the origin, production process and nature of uses, manufacturing industries are conveniently divided into several types:

1. The Metallurgical and Mining industries - The iron and steel, aluminium industry and mining of iron ore, bauxite, copper, lead and zinc, etc. are included in this type.
2. The Textile industries - The cotton textile, silk, woollen, jute, mesa manufacturing are note worthy.
3. The Chemical industries – The heavy chemical products, petrochemical, fertiliser, cement products are manufactured by these industries.
4. The Food and Beverages industry – All kinds of processed and packed food products are produced by these group.
5. Forest and wood-based industries – The furniture and paper industries are notable among forest-based industries.
6. Machine Tools and Electrical industries – All kinds of engineering products and electrical appliances are produced by these industries. The automobile, machine tools, ship, railway wagon are produced in these manufacturing industries.
7. Construction material industries – The processing of metallic materials and its transformation of construction material is the basis of these industries. Important among the industries are building materials.

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