Economic Activities

1. Economic Activities Prepared by Rachel Farrell

2. The Sectors of the Economy • Primary Sector – Extractive Industry • Secondary Sector – Construction & Manufacturing • Tertiary Sector – Service Sector

3. Primary Sector • Also known as extractive insdustry. • Turns natural resources into raw materials for use in secondary sector. • e.g. agriculture, forestry, fishing, mining.

4. Agriculture • Produces meat, milk, cereals & horticultural output. • 1/3 of the largest firms in Ireland use agricultural output such as milk & beef in their products.

5. Problems with agriculture • Climate: Bad weather distroys crops. • Output: Overproduction leads to low prices - milk quotas and single farm payments restrict the amount of milk & beef that can be produced in order to keep farm incomes higher. • Disease: Foot & Mouth, BSE, Salmonella, Bird Flu…………

6. Forestry • Forests in Ireland mostly owned by Coillte (one million acres) • They are involved in tree plantation & timber processing …… Problems: • Forestry drains nearby soils of vital nutrients. • Land used in forestry cannot be used for animal rearing.

7. Fishing • BIM is the Irish Fisheries Board. • They promote the fishing industry. • Fish is caught and sold fresh, processed or frozen. • Salmon farming is on the increase. Problems: • Overfishing – depletion of fish eg. Cod • EU quotas – limits put on fishing • Competition from large European fleets.

8. Mining • Tara mines – zinc & lead (exported) • Monaghan – gypsum (plasterboard) • BNM – peat (generates electricity, fuel, peat moss……) Problems: • World demand for zinc is falling. • Closures of some mines. • Mining damages the environment.

9. Secondary Sector • The manufacturing & construction sector of the economy. • It turns raw materials into finished products. 3 Main Groups • Transnationals (TNC’s) • Agri-business • Indigenous Firms

10. Transnationals (TNC) • Large business with headquarters in one country and branches in many others. • May move operations from one country to another in response to market conditions. • IDA offers incentives to foreign TNC’s to set up here. • e.g. INTEL, IBM, Coca Cola, Nestle, Unilever……….

11. Unilever

12. Agri-business • Turns produce from agriculture into food products, e.g. Glanbia plc. Opportunities: • Access to new markets of Eastern Europe. • Produce GM free, organic, clean food. • New product ideas, yogurt drinks ….. Challenges: • Competition from other countries. • Powerful multiple stores dictating prices & credit terms.

13. Indigenous Firms • Set up in Ireland by Irish people. • Helped by Enterprise Ireland & County Enterprise Boards. Advantages: • Loyal to the country. • They foster an enterprise culture. • Profits remain in Ireland and reinvested in new businesses. Challenges : • Competition • May depend on TNC’s.

14. To ensure success the secondary Sector needs to: • Produce high quality goods. • Export, find new markets. • Invest in capital & R & D. • Avail of advice & grants from Enterprise Ireland(indigenous) IDA (TNC’s). • Adopt World Class Manufacturing (WCM) (TQM, Empowerment & Quality Control).

15. Tertiary Sector • Service Sector. • Provides support services for the extractive & manufacturing sectors and to consumers. • e.g. finance, insurance, medical, beauty, recreation……… • It is the last to develop, but eventually becomes largest employer.

16. Why is the tertiary sector the fastest growing sector? • Economic development = increased wealth. • Increased wealth = increased demand for services. • Expansion of Public Sector = more jobs in health education …. • Expansion of business = need for support services. • International trade in services such as IT & finance.

17. The 4 stages in the development of the economy, • Decline in agriculture as technology improves. • Growth in construction & manufacturing. People move to non rural areas to live. • Growth in service sector to support the growth in manufacturing & construction. • Globalisation of services facilitated by developments in ICT.

18. Contribution of the three sectors of the economy Primary Sector • Provides raw materials for secondary sector. • Provides approximately 10% employment, tax etc.. • Pump a lot of money into the Irish economy by purchasing machinery and consumables for their business. • Export a lot of produce.

19. Secondary Sector • Consume Irish raw materials e.g. Ribena. • Provides appproximately 25% employment, tax.. • Export a lot of their produce. • Encourages the development of indigenous firms.

20. Tertiary Sector • Provides support services for the primary & secondary sectors. • Employs approximately 65% of work force, tax.. • IFSC attracts half of the worlds top 50 banks & half the worlds top 20 insurance co.’s. • Invisible exports such as call centres provide Ireland with more wealth.

21. Important trends & issues in the main industries in Ireland. Primary • Quotas, organic food, provision of sustainable energy to reduce dependence on oil, more forests. Secondary: • IT TNC’s coming to Ireland, Manufacturing TNC’s leaving Ireland (FOTL), major infrastructural improvements, slowdown in construction.

22. Tertiary • Huge increase in services supplied. • Invisible exports such as call centres, software development, finance….. • Foreign banks and insurance companies locating in International Financial Services Centre in order to have access to EU market.

23. 4 Factors of Production • Land • Labour • Capital • Enterprise

24. Land • All things supplied by nature. • Natural resources used in production. • e.g. fields, water, natural gas, oil, coal, minerals, trees…….. • The payment/reward for land is rent.

25. Labour • The human element in the production process. • e.g. employees, builders, carpenters, factory workers….. • The reward for labour is wages.

26. Capital • All man-made things that help produce goods. • Money is invested to buy things such as buildings, machinery… • The reward for capital investment is interest.

27. Enterprise • Entrepreneur taking the initiative and risk to set up a new business. • e.g. Ramona Nicholas, Richard Branson… • The reward for enterprise is profit. • The risk of enterprise is loss.