Sorting work into sectors

The chapter opens with Kauṭilya's Arthaśhāstra, the 2,300-year-old text you met in Chapter 11: 'The root of prosperity is economic activity, the lack of it brings material distress. The absence of fruitful economic activity endangers both current prosperity and future growth.'

In Chapter 13 we learnt about two kinds of activity, economic and non-economic. Activities that create monetary value are called economic activities. (Monetary value is value that can be measured in money.)

Over the decades, the number of economic activities has grown enormously. Earlier, most people worked in agriculture, rearing livestock, making tools, pottery and weaving cloth.

Today there are many more: making computers, mobile phones and drones; working in banks, schools and hotels; driving all kinds of vehicles; making furniture; tailoring clothes on machines; creating software; repairing refrigerators and washing machines; and so on.

With a list that long, we need a way to sort it. Classifying these activities helps us understand how they work and how they are linked to each other. Activities with similar features can be grouped into broader groups called economic sectors: broad groups of activities that help a nation prosper.

The three main economic sectors are primary, secondary and tertiary. The book's chart shows what goes where:

• Primary: agriculture, mining, fishing, raising livestock, forestry.
• Secondary: construction, manufacturing, water supply, solar power, electricity production.
• Tertiary: healthcare, trade and logistics (moving and storing goods), communication, banking, transport.