The Modern Economy: Primary, Secondary & Tertiary Sectors

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Capitalism vs. Socialism: Differences, Advantages/Disadvantages & the 'Underground Economy'

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:01 Economic Change
  • 1:09 Primary Sector
  • 1:52 Secondary Sector
  • 2:45 Tertiary Sector
  • 3:11 Future Sectors
  • 4:09 Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Speed Speed Audio mode

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Melissa Hurst

Melissa has a Masters in Education and a PhD in Educational Psychology. She has worked as an instructional designer at UVA SOM.

The modern economy can be divided into three sectors that reflect the economic development of that society. This lesson will discuss and explore the interaction between the primary, secondary and tertiary sectors of the modern economy.

Economic Change

Our nation's economy, like most modern world economies, has developed from one built on the extraction of raw materials for consumption and sale to one that is now more dependent on revenue from services. This economic shift is important to understand from a sociological standpoint because it impacts the proportion of the population engaged in various activities that support the economy.

In this lesson, we will explore economic change by discussing the three types of sectors of an economy: primary, secondary and tertiary. These sectors can be viewed as a continuum, starting with the primary sector, which is the part of the economy generated by extracting raw materials directly from the earth for consumption or sale; moving next into the secondary sector, which is the part of the economy that transforms the raw materials into goods for sale or consumption; and finally the tertiary sector, which is the part of the economy that involves the sale or trade of services instead of goods.

Primary Sector

The primary sector involves the extraction of raw materials from the earth. This extraction results in raw materials and basic foods, such as coal, wood, iron and corn. The types of workers in this sector include farmers, coal miners and hunters.

In the U.S. and similarly in most other modern world countries, there is a decline in the proportion of the population that works in the primary sector. Currently, only 3% of our nation's labor force is engaged in primary sector activity. This is a big change from the mid-19th century in which two-thirds of the labor force was engaged in this sector.

Secondary Sector

The secondary sector involves the transformation of raw materials into goods. This transformation results in wood being made into furniture, steel being made into cars or textiles being made into clothes, as examples. The types of workers in this sector include a seamstress, factory worker or craftsman.

The development of this sector can be attributed to demand for more goods and food, which leads to industrialization. Only so much can be done in the primary sector before there is a natural limit on how much can be extracted. When an economy moves into the second sector, new farm techniques are used, and industrialization changed how goods can be transformed, distributed and sold. Currently, 20% of the U.S. labor force is involved in the secondary sector.

Tertiary Sector

The tertiary sector involves the supplying of services to consumers and businesses. This sector provides services to the general population and businesses, including retail, sales, transportation and restaurants. The types of workers in this sector include restaurant bartenders, accountants and pilots. The service industry makes up 80% of the labor force today.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account