Page 26 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 1 Understanding business activity

ACTIVITY 2.4

The data below shows countries which are currently classified as having developing or developed economies.
Country data for business activity by sector

Primary sector as a % of Secondary sector as a % Tertiary sector as a % of
the total economy of the total economy the total economy
Developing economies
Rwanda 33.3 13.9 52.9
Vietnam 21.5 40.7 37.7

Zimbabwe 20.3 25.1 54.6
Developed economies
Bermuda 0.7 7.0 92.3
Japan 1.2 27.5 71.4
Norway 2.7 41.5 55.7

1 Which country has the lowest percentage of activity in the primary sector, but the highest percentage of business activity
in the tertiary sector?

2 Which country has the smallest percentage difference between primary business activity and secondary business activity?
3 Using data from the table to support your answer, is it true to say that countries whose tertiary sector is larger than their
other two sectors of business activity are always developed economies?
24 4 What does the data in the table tell you about the relationship between primary business activity and developing and
developed economies?

The importance of business classifications has changed for many countries.

There are two main reasons for this:
■ Industrialisation – the growing importance of secondary sector business activity
and the reduced importance of primary sector business activity. The emerging
economies of both China and India are good examples.
■ De-industrialisation – the growing importance of the tertiary sector and the
reduced importance of the secondary sector. The UK and USA are good examples of
this type of economic activity.

However, the changing importance of business classification may also be due to the
following:

■ A change in consumer behaviour as a result of both industrialisation and
de-industrialisation.
❏ Consumers have a higher income and they demand better quality and a wider
choice of products.
❏ Better education – consumers expect better products and know that they can

buy goods from suppliers in a different region or country through e-commerce.
❏ More leisure time – consumers work fewer hours than they used to. The demand
for leisure activities, such as cinemas, restaurants and holidays, has increased.