The secondary sector includes all economic activities involved in creating a finished, usable product using resources and raw materials. This sector mostly includes refining, manufacturing, food processing, and construction. Essentially, the secondary sector turns the goods produced by the primary sector into goods that have increasing value as they now have consumers that demand or want their product. The secondary sector adds value to the raw materials and resources from the primary sector.

Here are several examples of interrelated primary and secondary sector activities where value is added to the raw material or resource by a secondary sector activity:

Primary Sector Example	Secondary Sector Example
Growing and harvesting oranges	Using oranges to make orange juice used in grocery stores
Clearing timber from a forest	A paper or lumber mill that makes computer printer paper or into 2x4s
Mining or fracking for oil	An oil refinery that converts crude oil into gasoline
A West Virginia coal or iron ore mine	A Pittsburgh steel mill using coal to heat steel & iron
Mining of coltan in Central Africa	Using coltan to make Tantalum capacitors in Apple iPhones
A rubber tree plantation	Goodyear Tire & Rubber Company
Coffee beans harvested in Kenya	Coffee beans roasted, sorted, and packaged in a US facility
Cod fishing off the New England coast	A food processing facility that packages frozen filets of cod

The secondary sector is essentially the making of stuff, which relates to your “Assignment 2: Where does your stuff come from?”. However, there is a wide variety in terms of the skill level required and value created from manufacturing different products. Let’s compare, for example, a t-shirt and a 60” LED flat-screen television. The skills required to make a t-shirt are minimal, as the techniques to work a textile machine in a mill are rather easy to learn compared to assembling all of the electrical and metal and plastic components in a flat-screen. Further, the t-shirt is much cheaper, but also made in much more abundance than the televisions because everybody needs t-shirts, but not everyone needs a new flat-screen TV.

In general, secondary sector jobs and activities are decreasing in developed, Stage 4 countries. Many of these developed countries industrialized throughout the 1900s, however, as a result of globalization, secondary sector jobs have relocated to new areas to minimize costs of production. The removal of heavy industry and manufacturing from an area is called deindustrialization and is critical to understanding high unemployment rates in many former industrial or manufacturing towns and cities in developed countries.

For example, Detroit, Michigan, and Anderson, Indiana have both seen a decline in jobs as a result of factories closing, laying off workers, or relocated to another part of the world for cheaper labor. These “newly industrializing” areas in semi-peripheral areas are seeing an increasing percentage of secondary sector jobs and include, South Korea, Taiwan, Singapore, Brazil, Mexico, and, of course, China. See your Assignment 2 (Where your stuff comes from?) for some of these secondary sector-dominant countries.

Recent Trends in the Modern Global Economy: Deindustrialization in the USA
Over the past 50 years, there has been considerable changes or shifts in secondary sector activities in the United States. In particular, manufacturing has changed in terms of where it occurs, what is made, how it is made, and…

First, there has been a geographic shift with deindustrialization in the “Rust Belt” and subsequent industrialization in the “Sun Belt”. This pattern overlaps with observations made in previous chapters of an out-migration of people in towns and cities in the Midwest and Northeast regions of the United States. As manufacturing and industry jobs decline in the Rust Belt, job increases and industrialization are occurring in the Southeast, Southwest, and parts of the Great Plains.

Two key reasons for the relocation of manufacturing and industry are 1) booming populations in the Sun Belt and 2) a higher number of low-wage workers. As the Sun Belt sees more and more domestic and international migrants, population sizes are increasing, which increases the local supply of workers and local demand for products. If a product can be manufactured at a lower cost somewhere else, chances are high it will. Therefore, the cheaper wages demanded by workers in the Sun Belt are attractive to manufacturing companies that are leaving the Rust Belt for new opportunities elsewhere. Further, foreign secondary sector companies that are investing in facilities in the United States are increasingly more likely to choose the Sun Belt over the Rust Belt.
Bring home our jobs
Here is a photo using too many Instagram filters of the United Steelworkers sign in Portage, Indiana showcasing deindustrialization in this area of the Rust Belt (photo by author).

Second, there has been a shift in the types of goods manufactured. Instead of manufacturing rather simple products, like clothes and basic electronics (examples: an iron, a toaster, a light bulb), the United States manufacturers more and more sophisticated electrical equipment and more high-tech, specialized automotive parts. Since 2000, United States production of electrical equipment has increased 75% while clothing and textiles have fallen 50%. For example, the United States manufactures CAT/CT scan machines, which look inside the human body to investigate the health of your internal organs. Further, we are the leader in computer chip manufacturing, which is key to smartphones getting smaller and smaller but yet being able to store and process more information and data than ever before.

Third, there has been a shift in how goods are manufactured in the United States. This shift began in the 1980s and actually originated in the Japanese automobile industry and later diffused here. Traditionally, manufacturers in the United States utilized mass production, which is associated with a massive assembly line, tons of workers, and extremely large facilities/plants. As the name implies, these facilities produced a massive number of products to meet increasing demand from overall world population and economic growth. However, as population slowed down, new markets and countries emerged as locations for manufacturing and industry, the geography of manufacturing changed. Labor-intensive manufacturing moved to places with cheaper labor (see NIKE in Asia). Instead, the United States was manufacturing more expensive products with smaller, more specialized markets of consumers. This meant the United States had to change how it did a lot of its manufacturing, using insights and successful techniques by Japanese automotive companies.

This change is called flexible production, and is based on a change in production from making a lot of something to utilizing more customization and products “made-to-order”. This reduced the cost of manufacturing because 1) you only make what you plan on selling and 2) you did not have inventory and warehouse costs used to store a massive amount of products that may or may be purchased. In other words, instead of building 10,000 Ford F-150 trucks and hoping they will be sold, manufacturers would only build a Ford F-150 if someone wanted one. Further, they can make it custom-made, based on color and add-on preferences. In being more efficient, the Japanese automakers, and later other manufacturers that copied them, lowered the price of their goods, thus making them even more attractive to customers.