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Unit 6
Primary
Secondary
Tertiary
Factors of Production
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Agriculture
Fishing
Primary
Forestry
Mining
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 The
primary sector (extractive) is a category
of industry based on the natural resources of
a country such as agriculture, forestry,
fishing, mining, energy.
 Some extracted material is used in its raw
state, but generally the output of these
industries is passed on to secondary or
tertiary sectors for use in goods and services.
 Some resources are non-renewable, e.g. oil
and gas. Others are renewable, e.g. wind
and solar energy.
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
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Agriculture: Accounts
for 4% of total
employment in the
country and 6% of all
exports.
Ireland exports almost
90% of its beef output,
making it the largest
beef exporter in the
world.
The seafood industry
employs 11,000 people
and contributes €700
million annually to
national income.
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
Coillte is the
commercial state
company which owns
more than half the
forests in Ireland. It
employs 1,100 people
and generates income
from commercial
forestry and renewable
energy. The value of
Irish forest sector
exports is close to €350
million p.a.
Tara Mines is the largest
zinc mine in Europe and
employs 700 people.
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Employment: Many people in Ireland work in
agriculture, fishing, forestry and mining. They
pay taxes on their wages and this gives the
government more money, so it can improve
Ireland’s economy by reducing taxes, increasing
grants and improving infrastructure.
 Consumer of Irish products: Primary industries
are a major consumer of Irish products, so they
pump money into the ecomony. Farmers use
farm machinery, fertilisers, chemicals, animal
feed, vets etc. This has a spin off effect for
these businesses, increasing their profits.

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 High
level of exports: the primary industry
exports a huge amount of raw materials
abroad, thus improving our Balance of
Payments. This brings money into the country
and creates wealth. E.g. forest sector
exports value €350 million p.a.
 Provides food: Much of the primary industry
is concerned with providing food here in
Ireland. This makes us less dependent on
foreign imports, thus improving our balance
of payments.
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
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Current Trends
Commodities such as beef and milk are commanding
higher prices on world markets as demand increases
due to global population growth.
Cóillte the state agency operating in forestry, land
based businesses, renewable energy and panel
products may be privatised along with other
businesses such as Electric Ireland.
Restriction on turf cutting due to EU environmental
directive. The EU have designated some bogs “Special
Areas of Conservation”. Owners of these bogs are no
longer allowed to cut off them or plant them.
Owners who had recently used these bogs will be
compensated financially. The restrictions are seen by
many as an attack on rural Irish culture and lifestyle.
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 Farm
numbers in Ireland declined
continuously over recent decades. Over half
of all farmers are over 55 years old.
Demographic and lifestyle changes make it
more difficult to attract young people to
agricultural careers.
 The CAP has provided farmers with a Single
Farm Payment. The process of separating
that from productivity is called decoupling.
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Some fish stocks have been depleted due to
overfishing. The CFP sets out very strict rules
and quotas designed to prevent overfihing and
preserve fish stocks. A quota is a limit on the
quantity of fish which can be caught. Since
quotas are based on historical fishing trends,
Ireland’s small fleet means our quota is
relatively low.
 The Kinsale gas field currently only provides a
fraction of our energy needs and this will decline
in the coming years. Much hope had been placed
on the exploration of Corrib gas field, but this
has been surrounded by controversy.

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Fracking: Gas deposits discovered in the
Fermanagh/Leitrim border may be mined using
‘fracking’ a controversial mining technique
involving taking gas from shale.
 Wind energy is being explored with the planned
development of 450 wind turbines across the
midlands. An environmental impact study has to
be carried out as health concerns have been
raised by those living in the area.
 Continued growth in organic food production
capitalises on Ireland’s green image worldwide.

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 The
secondary sector includes:
Manufacturing, Agribusiness and Construction
businesses.
 This sector takes raw materials, processes
raw materials and produces finished goods.
 They add value to the raw materials, making
them more appealing to consumers.
 Example: Kerry Group – Food Products.
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Manufacturing
Secondary
Agribusiness
Construction
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 Manufacturing
industry:
 High Level of Exports: New high tech
manufacturing have set up in Ireland
including chemicals, pharmaceuticals,
medical supplies, electronics and computer
equipment. Most of these are foreign owned
and export from Ireland. These therefore
improve our balance of payments.
 Employment: Manufacturing creates direct
and indirect employment. These people pay
taxes on income earned and spend their
disposable income.
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 Consumer
of Raw Materials: Manufacturing
companies buy the output of the primary
industry and turn it into finished goods. This
provides income to those in the primary
industry and raises the standard of living.
E.g. Ribena buys 95% of Irelands
blackcurrants.
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Current Trends:
 (i) Decline in employment in Secondary Sector –
downsizing and closures have resulted in an
increase in unemployment, particularly in
relation to Manufacturing and Construction
 (iii) Increased wage rates in Ireland over the past
few years has resulted in loss of competitiveness
– relocation of some manufacturing businesses to
low cost economies. Traditional manufacturing
industries such as clothing and footwear have
declined.

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A
term used to describe a broad range of
agricultural activities, not just farming but
the processing and marketing of farm
produce.
 The sector directly employs 50,000 people
and supports a further 60,000 indirect jobs.
This is close to 7% of all employment.
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Agribusiness: The sector is dominated by
indigenous producers which are small by
international standards. To improve their access
to capital several of these firms have changed
their structure from cooperatives to PLCs, e.g.
Glanbia and Kerry Plc.
 Many Irish producers benefit from Ireland’s green
image and protecting this image and reputation
will be a major challenge for the industry.
 Increased competition- challenge faced by
Agribusiness Sector in food market from foreign
retailers i.e... Lidl and Aldi

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The construction industry provides Ireland with
housing, commercial property and
infrastructure.
 It is a very labour intensive industry.
 Employment in construction rose by 40%
between 2002 and 2008. over 300,000 people
were employed in construction in 2007 (13% of
employment).
 The economic slowdown led to massive
unemployment in the industry. By 2011 total
employment had fallen to 100,000.
 The recession has put on hold major
infrastructural projects such as Metro North.
This results in a loss of potential jobs in this
sector.

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 The
services sector is the largest sector in
Ireland. Its aim is to provide a range of
services to businesses and consumers. E.g.
financial services, medical services,
transport services, leisure services.
 Labour intensive.
 The IFSC was built to attract and support
companies who engage in internationally
traded services such as finance, insurance,
consulting and communications.
 Tourism is one of the most significant service
sectors.
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Importance of:
 Biggest Employer: this sector is the biggest
employer of Irish people. People employed in
this sector pay taxes on their income and spend
disposable income, which are beneficial to the
economy.
 Exports: Ireland exports financial services thus
improving our Balance of Payments. This brings
money into the country.
 Attractive to TNCs: A well developed service
sector is attractive to TNCs that are looking for a
country to locate in, e.g. telecommunications
and transport services.

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Taxes such as the household charge, property tax and
cuts in government expenditure on social welfare
have led to a fall in the disposable income of
consumers. As consumers’ spending power is reduced
the demand for the goods and services that
businesses sell in the retail services sector has fallen.
Closures/examinerships/insolvencies of retailers.
Recession hitting the small and medium enterprises
e.g. suppliers to construction industry.
The Gathering 2013 and its impact on services
(Hotels, travel etc).
The growth of e-business, a method of buying and
selling goods and services over the internet, is
changing the dynamic of the services sector. Retailers
moving to on-line operations include Tesco and Next.
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Businesses in the services sector are facing a decrease in footfall because
of the challenges facing town centres due to competition from large
suburban shopping centres and the restrictive parking regimes in
operation. Expensive parking tickets, fines and the threat of clamping are
driving people out of town centres where many service sector businesses
operate.
VAT increases lead to more expensive goods and services for the
consumer which in turn causes demand to fall, thereby affecting
business. For example the volume of sales in department stores fell by
18.4%, and electrical goods fell by 12.0% as a consequence of the
negative impact of the VAT rise to 23%.
Increases in excises duties on tobacco products have led to an increase
in tobacco smuggling. Excise duties on cigarettes continue to rise,
increasing the incentive for customers to choose cut price illegal
products sold on the black market. In 2010, Ireland’s retailers lost €896
million in turnover to the Black market.
The growth of the ICT sector has led to employment opportunities. At a
recent Intel Forum on Education, the CEO of Fujitsu Ireland said that 75%
of ICT employers in Ireland have job vacancies. There has been growing
concern at the rising skills shortage in the ICT sector, a situation made
worse by the low number of students opting for technology courses at
third level.
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Provided by
Nature
e.g. Crops,
Forests, Sea,
Oil
Labour
Human effort
Factory
workers,
mechanic
Wages
Capital
Man made
goods
Machinery,
infrastructure
Interest
Enterprise
Combining
the others
and taking
the risk
Joe Murphy
set up Tayto
Profit
Land
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Rent
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Land is anything provided by nature, used in the
creation of wealth. E.g. Forests, Sea. It earns
rent.
 Labour is any human effort, both physical and
mental, used in the creation of wealth. E.g.
factory workers. It earns wages.
 Capital is anything man made used in the
creation of wealth, i.e. used in the production
process, e.g. machinery. It earns interest.
 Enterprise brings the other three factors of
production together and organises them in order
to create wealth. The entrepreneur uses their
initiative and takes the risk to make a
product/service. E.g. Joe Murphy set up Tayto.

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2013
 Q2 (c) Discuss current trends affecting
businesses in the services sector of the Irish
economy. Provide examples to support your
answer (20 marks).
 2012
 Define the primary sector. Outline two current
trends affecting this sector in Ireland. (10 marks)
 2009/2003
 Define the secondary sector and outline two
current trends affecting this sector in Ireland (10
marks).

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 2007
 Discuss
the importance of the categories of
industry to the current Irish economy (20
marks).
 2006
 Outline the categories of industry in the Irish
economy. In the case of one of these,
describe its contribution to the economy (20
marks).
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