Terminologies

Industrialization

Firm

A firm is simply one single business or company that makes things or provides services to people.

Firm: A firm is an entity that embarks on the creation of utility.

This means a firm can be a company that turns raw materials into products, a business that takes resources from nature, or a company that helps people do things.

A firm must create something that has value for the people in the country.

Examples of firms include First Bank which gives financial services, and Dangote Cement which turns raw materials into bags of cement.

Other examples are Simbibot which provides education services to help students understand their subjects, and Total which looks for oil and sells fuel.

Industry

An industry is a group of different companies that are all doing the same kind of business.

Industry: An industry is a group of firms that engage in similar activities in an economy.

In simple words, an industry is made up of two or more firms that produce the same type of goods or services in a country.

For example, all the different banks where you can save money belong to the commercial banking industry.

Also, banks that help companies raise money or join together belong to the investment banking industry.

Sub-Sector

A sub-sector is a collection of industries that do almost the same work but with small differences.

Sub-sector: A sub-sector refers to two or more industries that embark on similar activities with little variations or differences.

It means different industries that are very close in what they do are grouped together as a sub-sector.

For example, in the tertiary education system, we have Universities, Polytechnics, and Colleges of Education.

They all provide high-level teaching but in slightly different ways, so they form the tertiary education sub-sector.

Inside this sub-sector, the university industry has many individual schools which can be owned by the government or private people.

Sector

A sector is one of the biggest parts that an economy is divided into.

Sector: A sector is a major sub-division of an economy.

It is a very wide way of grouping all the different businesses and activities that make money in a country.

For example, we have the financial sector which covers everything about money.

Inside this financial sector, we have the banking and non-banking sub-sectors, which then have different industries and many small firms.

Plant

A plant is a very big machine or a set of big equipment used to make products in a factory.

Plant: A plant is large production equipment used in the transformation of raw materials into finished goods.

A plant is a fixed asset, which means it stays in one place, costs a lot of money to buy, and needs plenty of money to keep it working.

Key points to note about a plant

It is productive equipment which is fixed in nature

It requires a huge fund to set up and therefore there must be proper financial analysis

A plant is subject to depreciation

A plant requires proper maintenance in order to prevent idle time and stock out cost