Difference Between Sector and Industry
Out there, lots of people don’t know the answer to that question, “What is the difference between sector and industry?” Well, they are not to blame. The reason is that when you read lots of articles out there, you would realize that many writers consider both words as synonyms. As a result, their readers assume that the two nouns can be used as such.
But that is wrong. The truth is, they have loads of disparities, and you will see the difference between sector and industry as you continue reading. Are you anxious to know these differences? If yes, we will start this article with the definitions of the two nouns.
Definition of Sector
Basically, sector is a word used to bring into context the various components that make up the financial standing of a country. The collection of these key components makes up the entire economy. In fact, the definition of sector is the same irrespective of the place or factors taken into consideration.
Beyond questions, commercial frays are used as yardstick for categorizing businesses that fall into this category. However, it takes into consideration the broader scope of stakeholders that work within it. It can be divided into four components:
- Primary: This area has to do with extracting mineral resources. Every firm that deals with natural resources falls into this category. Examples are organizations that are involved in these economic frays
- Secondary: With respect to this aspect, it concerns all the firms that transform raw materials in outbound products
- Tertiary: These are firms that deal in support services. These organizations include retail chains, banks, other financial services, and transportation
- Quaternary: Finally, there are organizations that specialize in investing a reasonable amount of resources in hope of advancing the body of knowledge. Generally, they include Research & development (R&D) establishments, and educational institutions.
Next, we will look at the meaning of the other noun.
Definition of Industry
On the other hand, industry is a word that mirrors a collection of for-profit establishments that are in the same line of commercial fray. Being in the same line of trade means that the organizations deal in the same line of trade. As far as this is concerned, the name used to describe them depends on the nature of commercial frays they are into. This is a bit slimmer because it involves the chains of processes used to churn out a particular good or service that a company offers.
Typical instances include production, extractive, etc. Technically, the definition of industry is a bit more streamlined to enterprises that are in the same line of business. Although it could be narrower, it can also be split into smaller units. For instance, you can subdivide the insurance into home, corporate, life and other types of insurance available in that space. However, when you subdivide it, you will only get to common examples. So, it is rarely divided any further.
Generally, firms that fall into industries share striking similarities, which are used as basis for grouping them. They could have the same customer base, financial statements or production process. Now, find out the difference between industry and sector in the table below.
Sector vs Industry Comparison Table
|Basis of Comparison||Industry||Sector|
|Definition||A collection of firms that offer the same service categorized as a unit||This is a segment of the economy|
|Divisions||Maritime, financial services, Information Technology, etc.||Primary, secondary, tertiary, and quaternary|
|Further Division||Cannot be divided further||Can be divided into industry|
|Categorization||Key players share the same production process||Key players share the same business activities|
|Formation||Collection of related firms||Combination of industries|
Conclusion of the Main Difference Between Sector vs Industry
So far, we have taken some time to analyze industry vs sector, laying emphasis on the difference that the two words present. Well, if you didn’t know the disparity between these two words, we strongly believe that you do now.
If you came across the words, quaternary, for the very first time, it encompasses a wide range of related issues, especially knowledge and intellectual pursuit and education. In other words, some classic examples include consulting services. By and large, the two terms are used to mirror components of the financial state of a country viewed from different perspectives. At this juncture, that’s all you should know about both words.