1. Chapter 17 Categories of industry © Edco 2012 It’s the Business

2. Categories of industry Industry in Ireland can be classified under three headings: Primary sector: Extractive industries Secondary sector: Manufacturing and construction industries Tertiary sector: Service industries © Edco 2012 It’s the Business

3. Primary (extractive) industry The primary sector consists of natural resource based industries that extract wealth from the land. Those natural resources may be renewable or non-renewable. The major extractive industries include: Agriculture Fishing ForestryMining © Edco 2012 It’s the Business

4. Agriculture Accounts for over 60% of land use and approx 5% of total employment. Provides valuable raw materials for agribusiness industry and is a significant source of exports. Its importance has declined due to increased mechanisation, competition from larger farms, demographic and lifestyle changes as well as the impact of the EU Common Agricultural Policy. 2010-2011 saw short-term improvement in employment, income and export levels. © Edco 2012 It’s the Business

5. Fishing The Irish fishing industry is relatively small. The Irish seafood industry employs 11,000 people and contributes about €700 million annually to national income. EU fishing industry is governed by the Common Fisheries Policy (CFP). Some fish stocks are depleted due to overfishing. The CFP sets out very strict rules designed to prevent overfishing and preserve fish stocks. Fishing is seen as a tough way to make a living. © Edco 2012 It’s the Business

6. Secondary industries Industries in this sector add value to the raw materials from primary sector industries in order to make finished goods. Adding value means processing the raw materials in a way that heightens their appeal to the consumer and increases their economic value. Major secondary industries include: Manufacturing sector Construction industry © Edco 2012 It’s the Business

7. Manufacturing sector Indigenous companies Decline in traditional manufacturing due to low cost competition. Increase in ‘high tech’ manufacturing (pharmaceuticals, electronics, ICT). Large ‘agribusiness’ sector with strong exports. Transnational companies Employ 100,000+. Big emphasis on high tech manufacturing. Account for 70% of total exports from Ireland. © Edco 2012 It’s the Business

8. Construction industry Provides housing, commercial property and infrastructure. A very labour-intensive industry, potential to create large amounts of employment. This sector is susceptible to economic changes and has suffered huge decline in recent years. 2007 Employment: 300,000 Output = €40 billion. 2011 Employment: 100,000 Output = €10 billion. © Edco 2012 It’s the Business

9. Tertiary (services) industry The largest and fastest growing sector in the Irish economy. Examples include: Financial services - Medical services - Transport services - Leisure services. Most service industries are labour-intensive and this has a very positive impact on job creation. Improvements in IT have also led to growth. Tourism is a significant service sector in Ireland. © Edco 2012 It’s the Business

10. Irish Indigenous Industry Most indigenous firms are SMEs. Predominantly in agribusiness sector but also involved in ICT, electronics and medical sciences. Supported by Enterprise Ireland. Employ in excess of 300,000 people. Valuable source of exports. Loyal to the Irish economy. © Edco 2012 It’s the Business

11. Transnational companies in Ireland A transnational company (TNC) has business operations in several countries at a time. Examples of TNC’s in Ireland include Coca Cola, Microsoft, Intel, Pfeizer and Facebook. Predominantly in ‘high tech’ industries including ICT, electronics, pharmaceuticals. Supported by IDA Ireland. Employ in excess of 100,000 people. Export vast majority of their output. More mobile than indigenous firms. © Edco 2012 It’s the Business

12. Foreign direct investment IDA Ireland is the state agency responsible for attracting foreign businesses to locate in Ireland. Ireland is an attractive location for FDI due to: Low corporation tax Government grants EU membership/market access Skilled workforce Custer effect (presence of other TNCs) © Edco 2012 It’s the Business