Difference Between Similar Terms and Objects

Difference Between Sector and Industry 

The terms sector and industry are used to indicate enterprises that operate in a particular segment. However, the two terms represent different divisions of the economy.

 

What is a Sector?

The term sector is used to represent a group of industries that have common attributes, which are used to define them. Different sectors have specific characteristics, which mean that the industries in the sector operate in a specific line of products or service.

The economy is divided into four general sectors, which include; primary sector, secondary sector, tertiary sector, and quaternary sector, which is formed by intellectual activities like education and research among others.

 

What is an Industry?

The term industry is used to refer to a specific form of business activities within a specific region. Some of the business enterprises, which are isolated to form a business, include tourism, entertainment, and clothing industry among others.

Besides, a group of enterprises or businesses, which have related economic activities either production of similar goods and adoption of similar technical or technology application, is referred to as an industry.

Examples of Industries include:

  • Service industry
  • Construction industry
  • Genetic industry and
  • Extraction industry among others

 

Difference Between Sector and Industry

Meaning of Sector and Industry

The main difference between a sector and an industry is the meaning of the two economic divisions. A sector includes a division of economy where a large number of industries which have related activities.

On the other hand, an industry is a division of the economy, which is formed by a large number of business enterprises, which have related activities. For example, a large number of hotels in a specific region form the hospitality industry.

All industries in a specific sector have similar properties, which is similar to the business enterprises within a particular industry, which share similar characteristics including technology adoption and application.

Scope of the Industry/Sector

The scope of the industry is narrow because it contains a limited number of business operations in enterprises with similar characteristics. Therefore, industries are regionalized because different regions deal with specific economic activities.

On the other hand, a sector is a broad economic division, which comprises a large number of industries. In some specific scenarios, a sector may cover the whole economy of a country, especially for the countries, which specialize in the production of any particular product.

Producing a specific product in a country makes the industries in the economy to specialize in the production of the product hence adopting similar technology and thus making them comparable.

Classification of Industry/Sector

The classification of industry and sector forms a significant number of differences. Industries are usually classified on the basis on the process performed by the business enterprises in that industry.

On the other hand, sectors are usually classified on the method through which the economy of the country is divided. Sector divides the economy into various segments based on business activities undertaken by the firms.

Term Categorization

About the categorization of the term, industry refers to a specific group of firms and business enterprises performing related activities either manufacturing, production, or offering services to their clients.

On the other hand, the term sector is a general term that explains the number of industries in a specific region performing related activities. It is essential to highlight that there is a probability that firms performing different operations are likely to exist in the same sector.

Policy Flexibility in Sector and Industry

Government and other agencies, which have direct control of the economic activities consistently formulate and implement policies and strategies aimed at improving the performances of the economy.

The policies formulated and implemented to improve and manage and industries are concrete because they focus on one particular product or service. This means that the activities carried out are well defined, which makes the policies to be particular.

On the other hand, the policies formulated and implemented to control and manage a sector are required to be flexible. This is because there are a considerable number of industries operating in different parameters and the policies formulated must work for each industry.

Management of Sector and Industry

Managing an industry is a moderate easy task because all the business enterprises in that region deal with well-defined products and services.

Moreover, the number of business enterprises is known which it is not very large which makes it easy for the managers to manage and control industry.

On the other hand, managing and controlling a sector is a challenging task, which requires professional expertise and experience to ensure that the sector works efficiently without challenges.

The difficulties in managing a sector arise because there are hundreds of industries operating in a specific sector. Due to a large number of industries in a sector, managers are usually overwhelmed by the task ahead.

Besides, it is difficult to manage and control the large number of industries, which are likely to be participating in different activities hence making it difficult to maintain.

Difference Between Sector and Industry: Chart

Sector VERSUS Industry

Summary of Sector and Industry

  • A sector and an industry are divisions of the economy that are used to offer a glimpse of the characteristics of the enterprises operating in a specific region.
  • A sector refers to a division of the economy with a large number of industries while an industry refers to a segment of economy where some business enterprises have related activities and operations.
  • Other differences that exist between an industry and a sector include; management aspects, policy formulation and implementation, categorization, classification, scope, and meaning among others.

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References :


[0]Bhattacharya, B. B., and Arup Mitra. "Excess growth of the tertiary sector in Indian economy: Issues and implications." Economic and Political Weekly (1990): 2445-2450. 

[1]De Vinck, Sophie, and Sven Lindmark. Statistical, ecosystems, and competitiveness analysis of the Media and Content Industries: The Film Sector. No. JRC69525. Joint Research Centre (Seville site), 2012. 

[2]Sasser, W. Earl, and Stephen P. Arbeit. "Selling jobs in the service sector." Businesshorizons 19.3 (1976): 61-65. 

[3]Image credit: https://www.pexels.com/photo/0-budget-business-car-532212/

[4]Image credit: http://www.thebluediamondgallery.com/handwriting/images/private-sector.jpg

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