Secondary and Tertiary Industries

2026 Syllabus Objectives

By the end of this topic, you should be able to:

  1. Understand the definitions used in Pakistan to distinguish between large-scale industry, small-scale industry and cottage industry
  2. State the main products of the listed industries and whether they are destined for the domestic market and/or for the export market
  3. State the main locations of the listed industries and explain the factors influencing location and development
  4. Understand the differences between the formal sector and informal sector of industry
  5. Understand the range of services provided by the informal sector, and their advantages and disadvantages
  6. Understand the importance of both the formal and informal sectors, and evaluate their contributions
  7. Understand sources of capital and labour
  8. State and explain how the governing authorities promote industrial growth
  9. Name examples of export processing zones and other industrial estates, explain the reasons for their development and describe their characteristics
  10. Assess the feasibility of using global communications to enhance employment opportunities in service industries
  11. State and describe briefly, with examples, some of the natural and cultural attractions of Pakistan that are available to tourists
  12. Assess the feasibility of developing tourism as a means of increasing employment, development, GNP and GDP

1. Classification of Industries in Pakistan

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Definitions of Industry Types

Industries in Pakistan are classified based on two main factors: the number of workers employed and the value of fixed assets (the equipment, machinery and buildings the business owns).

Large-scale Industry:

  • Employs more than 300 workers
  • Has fixed assets worth more than 100 million rupees
  • Characteristics: Uses a lot of machinery, requires high capital investment, produces goods in large volumes, needs large areas of land
  • Examples: Steel mills, cement factories, large textile mills

Small-scale Industry:

  • Employs between 10 and 50 workers
  • Has fixed assets worth up to 10 million rupees
  • Characteristics: More labour-intensive (relies more on workers than machines), uses limited machinery, often gets raw materials from nearby cities
  • Examples: Sports goods factories, surgical instrument workshops, small textile units

Cottage Industry:

  • Employs 1-5 workers, usually family members
  • Has very small fixed assets worth Rs 1-2 lakh (0.1-0.2 million rupees)
  • Characteristics: Very labour-intensive, uses little or no machinery, relies on local skills and raw materials, work is often done at home
  • Examples: Pottery, furniture making, carpet weaving, embroidery, handicrafts

Advantages and Disadvantages

Large-scale Industries - Advantages:

  • Generate thousands of jobs
  • Increase GDP (Gross Domestic Product - the total value of goods produced in a country)
  • Produce local substitutes for expensive imports (like steel or cement)
  • Earn foreign exchange through exports
  • Reduce dependence on other countries

Large-scale Industries - Disadvantages:

  • Cause air pollution from factory chimneys and increased traffic
  • Create water pollution when waste is not treated properly
  • Damage roads due to heavy trucks
  • Lead to deforestation and soil erosion when land is cleared
  • May trigger rural-urban migration (people moving from villages to cities)

Cottage Industries - Advantages:

  • Provide employment for poor people, artisans, and women
  • Reduce regional disparity (the gap between rich and poor areas)
  • Require low capital to start
  • Can employ illiterate workers
  • Reduce imports by meeting local demand
  • Earn foreign exchange (e.g., through carpet exports)
  • Preserve traditional skills and culture
  • Reduce rural-urban migration

Cottage Industries - Problems:

  • Low working capital and poor financial management
  • Inconsistent quality of products
  • Expensive marketing costs
  • Cannot benefit from economies of scale (buying in bulk to reduce costs)
  • May use poor quality local raw materials
  • Slower production compared to machines
  • Workers need a long time to master skills

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