Industry Definition, Benefits, Classification and Examples

Education. Co. ID – On this occasion, we will discuss the complete understanding of the industry, for an explanation below:

Industry Definition

Understanding Industry is an activity or activity of processing raw materials or goods semi-finished so that it becomes a finished product that has a high selling value and is sold to get profit. Or also this industry can be interpreted as a process of processing raw materials or semi-finished materials so that they become valuable finished goods for resale.

With a developed industry, a country will be more advanced and the economy will be more evenly distributed. This is because the per capita income will be higher and the prosperity of the community will also increase increased. Currently, the economy of our country, namely Indonesia, is increasing, due to the many industrial sectors that are growing rapidly. The more industries there will be more employment and will reduce unemployment.

Industry Benefits

Below are some of the industrial benefits that can be obtained, including the following:

• Reducing the number of unemployed means the number of jobs will increase.
• State income will increase if industrial products are imported abroad.
• Reducing domestic consumer consumption of products/goods from abroad.
• Improve the processing of available raw goods into semi-finished goods or finished goods so that they have a selling value.

Grouping or also Industry classification

Below is a classification or grouping with some basics including the following:

A. Based on where the raw material is

Based on the location of the raw materials, these industrial groupings are as follows:

1. Extractive industry

This type of industry takes raw materials directly from the natural surroundings (usually without being processed first) so that they will immediately have a selling value. such as plantations, fisheries, mining, agriculture, and others.

2. Non-extractive industry

Industries that take raw materials from other places or also take raw materials for their production from other industries. such as the fabric industry, as well as plywood.

3. Facilitative industry

An industry where the product is in the form of a service that is sold to consumers, so that consumers feel satisfied. such as transportation, expedition, insurance, and others.

B. Based on the size of the capital

Based on the size of the capital, this industry is grouped into:

1. Capital intensive industry

Is an industry that was built using a very large capital for its development and activities or operational activities.

2. Labor intensive industry

It is an industry that focuses on a large number of workers in the construction and operation of the industry.

C. Based on the capital used

Based on the capital used, this industry is grouped into:

1. Domestic Investment (PMDN),

Industry where the capital comes from domestic entrepreneurs or also the government.

2. Foreign Investment (PMA)

Industry where the capital comes from foreign investment.

3. Industries with joint ventures (joint ventures)

An industry whose capital comes from a mixture of capital from domestic and foreign entrepreneurs.

D. Industry by number of workers

• 1. Domestic industry
  It is an industry that has a small number of employees, only about 1 to 4 people.
• 2. Small industry
  It is an industry whose workforce ranges from 5 to 15 individuals.
• 3. Medium industry
  It is an industry whose workforce ranges from 20 to 99 people.
• 4. Big industry
  It is a very large industry, having more than 100 employees.

E. Based on industrial location selection

Based on the location selection, these industries are grouped as follows:

1. Market-oriented industry

The industry was established based on the potential locations of consumers, if consumers The potential in that place is getting bigger/more, it will be good for sales as well market. So the industry will be oriented or also focused on the market.

2. Man power oriented industry

Industries like this are usually located in the middle of community settlements, due to this type of industry requires a lot of manpower so that it is more effective and efficient in activities or activities operational.

3. Supply oriented industry

The industry is located near the location of the raw materials needed for a production process, The reason is that if you are closer to the location of raw materials for production, you will be able to save costs transportation.

F. Based on individual productivity

Based on individual productivity, this industry classification is as follows:

1. Primary industry

It is an industry in which the goods produced are not processed directly, so in this industry the goods are not processed first. such as agriculture, fisheries, plantations, livestock, and others.

2. Secondary industry

Is an industry that processes raw materials into semi-finished goods so that they can be reprocessed. such as silk thread which can be processed into silk fabric.

3. Tertiary industry

Is an industry whose products are services that can provide a sense of satisfaction to consumers. such as insurance, transportation, expedition, maintenance, and others.

G. Industry Based on the Decree of the Minister of Industry No. 19/M/I/1986

1. Basic chemical industry

Is an industry that produces goods that have chemical properties, such as fertilizers, cement, drugs, and others.

2. Basic metal machinery and electronics industry

Is an industry related to the processing of raw metal into finished metal that is commonly used. For example, airplanes, motor vehicles, television, computers, and others.

3. Small industry

Is an industry that has a small number of workers, such as a home industry, the goods it produces such as household appliances, crafts, and others.

4. Various industries

Is an industry that can produce a variety of goods for needs daily activities, such as the clothing, food and beverage industry, cooking oil, soap, and also etc.

5. Tourism industry

Is an industry that can generate profits from tourism activities, such as nature tourism, performing arts tourism, and others.

Examples of growing industries in Indonesia

Below are some examples of industries in Indonesia, including the following:

1. Fashion Industry

In Indonesia today, there are many fast-growing fashion industries, such as distributions and clothing. In this industry a lot of young people are doing it, because fashion is always evolving from time to time, and always popping up are various kinds of the latest fashion models. The industry is growing fast because it has a wide market and also new innovations in fashion are always emerging.

2. Mabel Industry

Also known as the furniture industry, which processes semi-finished or raw materials such as wood, rattan, and other materials into finished goods that have a high selling value. From the first this mabel industry was classified as very promising, there were many entrepreneurs who pursued the industry in their business. The goods produced are of course very necessary for daily needs, especially at home and offices. The goods produced from the Mabel Industry are for example: tables, cabinets, chairs, and so on.

3. Transportation service industry

Is an industry that sells services by providing ride-hailing services to consumers to be able to reach their destination. For example, such as train transportation services, online motorcycle taxis, busways, online taxis, and others.

Actually, like today, there are many examples of industries in Indonesia today such as the mining industry, expedition, insurance, textiles, pharmaceuticals, motor vehicles, and so on etc.

That's all and thank you for reading about the Definition of Industry, Benefits, Classification and Examples, hopefully what is described above regarding Industry can be useful for all of you.