An Introduction to Industries
Any part of the Economy that helps in production, processing or modification to more usable forms of available raw materials can be termed as an Industry. The most common manufacturing Industries are the Wood Industry, Metal Industry, Cement Industry, Chemical and Fertilizer Industry, Petroleum Industry, Textile Industry and so on. There are also Industries that produce various services as their final product. One such example is the Insurance Industry.
Nationally and Internationally Industries are Classified on the basis of various parameters such as ownership, final product, size or capital invested, infrastructure and many more. In this topic, we will learn about the Large Industries that are a category based on the Classification according to the size of operation.
Any production or services providing unit that starts with a suitable amount of investment evolves over time. Depending upon the pre-production facilities such as availability of raw materials, manpower, capital flow and post-production provisions of a good market nearby or transport facilities helps the Industry to grow in size and share. Traditionally heavy Industries such as iron and steel manufacturing Industries or aircraft manufacturing Industries are considered Large Scale Industries. In recent years various other Industries dealing with not so heavy items have also emerged as the major players of the Economy. The electronic or semiconductor Industry is a very good example in this category.
Classification of Industries as Large and small help them to maintain the standard of their various operations and responsibilities. In comparison to small Scale Industries, Large Scale Industries are more systematic in nature. They produce their products more efficiently and contribute to the Economy effectively. They also provide better employment opportunities with more job security. Large Scale Industries also invest money for research and design of new products which in the long run Benefits all of us. Thus it can't be wrong to say Large Scale Industries are the driving engines of any Economy.
Large Scale Industries Definition
Industries at different Scales constitute the various parts of an Economy. Large Scale businesses and Industries employ a significant number of people and offer politicians generous support. On the other hand, small enterprises affect the Economy at ground level where individual businessmen succeed. Small-Scale Industries are so small that they are not famous. However, it also contributes to the nation’s prosperity. Based on the Scale, Industries are Classified not just into Large-Scale and small-Scale Industries, but there are other Industries and public enterprises, multinational organizations as well. This article gathers all information about Large-Scale Industries.
What is a Large-Scale Industry?
As the name suggests, everything needed in large scale industries is in bulk or large amounts. All the different resources like workforce, the influx of capital, raw materials, the infrastructure required for the setup and execution of large-scale industry is enormous. It includes various types of industries in its purview. Large scale industry comprises multiple heavy and light industries. The heavy industry like steel, textile, and automobile manufacturing industry falls under the category of large-scale industry. It is also observed that IT has boomed in recent years. A large amount of revenue is generated from the IT industry; thus, the IT industry also comes under the large-scale industrial niche.
All these industries have produced a bulk amount of job opportunities for millions of citizens across the globe. Due to the export of the products manufactured in large-scale industries to different countries, any country's economic growth is highly dependent on its large-scale industries. The large-scale industry also contributes to the generation of foreign currency.
With this understanding, let us go through the importance of large scale industries.
Advantages of Large Scale Industries
The following are the prime advantages of a large-scale industry.
Economical Production using Machinery- The large-scale industry usually installs the latest machinery, which helps in economical bulk production. The machinery works continuously, and enterprises reap the benefits.
The Economy of Labour- Skilled labour put their best to perform. The large-scale industry utilizes the best out of its employees.
Bulk Buying and Selling- The large-scale industry not just involves massive production but also includes the bulk purchase of its raw materials. Thus small profit results in high net profit in large-scale businesses.
Low Overhead Charges- Expenses on administration and distribution on a single unit of production is comparatively less. It is possible because a small amount is invested and distributed over large scale production.
Economical Rent- The whole rent is divided by bulk products. It means when any product is generated in bulk quantity, the cost per unit for rent is too small.
Research and Analysis- Large scale industries can only incur the liberal expenses spent on research and analysis. It is known that successful research and analysis will fetch greater profits in the future.
Reuse of the Bye-products- The bye-products or the wastes of the large-scale industry is often utilized and is not thrown. It helps to lower the cost of production. A small sugar industry will get rid of the molasses produced as a by-product.
Beneficial for Employees- All workers are highly benefited by the large scale industries as they get high salaries, accommodation and various other remunerations.
Below are a few examples of global and Indian large scale industries.
Large Scale Industries Examples
Globally, there are a plethora of large-scale industries that contribute to the economy of different countries. To name few of them are Global Life & Health Insurance Carriers, Global Pension Funds, Global Oil & Gas Exploration & Production, Global Commercial Real Estate, Global Car & Automobile Sales, Cement, Global Car & Automobile Manufacturing, Global Direct General Insurance Carriers, Global Commercial Banks, Global Auto Parts & Accessories Manufacturing, Global Tourism. These are the top ten most significant large-scale industries in terms of revenue.
Indian industries that come under the umbrella of a large-scale industry are the cotton industry, tea industry, jute, cement, paper, engineering industry, food processing, information and electronic technology, and automobile industry. These are the few large scale industries contributing to the economy of India.
Fun Facts
Do you know the cotton textile industry is the largest in India? In 2018-2019, India aced the race and ranked at first position cotton production worldwide, followed by the United States.
Globally, India is positioned at the second place for tea production. China is known to be the largest producer of Tea.
If you get a chance to visit Ooty, Tamil Nadu, listen to the veteran Bollywood actress Mumtaz own most of the tea estates.
FAQs on Large-Scale Industries: Importance and Examples
1. What defines a large-scale industry?
A large-scale industry is typically defined by a significant investment in capital, a large workforce, advanced technology, and a high volume of production. Unlike smaller enterprises, these industries operate on a massive scale, often with fixed assets exceeding ₹10 crores. Their primary goal is mass production to serve extensive national and international markets. You can learn more about the basics in this introduction to industry.
2. What is the importance of large-scale industries for a country's economy?
Large-scale industries are crucial for a nation's economic growth and stability. Their importance lies in several key areas:
- Economic Growth: They contribute significantly to the Gross Domestic Product (GDP).
- Employment Generation: They create vast job opportunities, reducing unemployment.
- Infrastructure Development: Their establishment often leads to the development of transport, communication, and energy facilities.
- Foreign Exchange: They boost exports, bringing valuable foreign currency into the country.
- Technological Advancement: They invest in research and development, fostering innovation across sectors.
3. What are the key characteristics of a large-scale industry?
The main characteristics that distinguish large-scale industries include:
- High Capital Investment: Requires a huge amount of funds for machinery, land, and infrastructure.
- Large Workforce: Employs a substantial number of skilled and unskilled workers.
- Advanced Technology: Utilises modern, sophisticated machinery and production techniques.
- Mass Production: Produces goods in large quantities to achieve economies of scale.
- Complex Management: Involves a formal and hierarchical management structure to oversee vast operations.
4. Can you provide some examples of large-scale industries in India?
India has a diverse range of large-scale industries that are central to its economy. Prominent examples include:
- Iron and Steel Industry: Tata Steel, JSW Steel.
- Automobile Industry: Maruti Suzuki, Tata Motors, Mahindra & Mahindra.
- Information Technology (IT) Industry: Tata Consultancy Services (TCS), Infosys.
- Textile Industry: Arvind Ltd, Raymond Group.
- Petroleum Refining Industry: Reliance Industries, Indian Oil Corporation.
5. What are the essential requirements for setting up a large-scale industry?
Setting up a large-scale industry requires a combination of crucial factors to ensure smooth and efficient operation. These essentials include:
- Substantial Capital: For investment in land, machinery, and working capital.
- Skilled Labour: A large and proficient workforce to handle complex operations.
- Raw Materials: A consistent and reliable supply of raw materials.
- Advanced Machinery: Modern technology to ensure efficient mass production.
- Infrastructure: Uninterrupted power supply, water, and robust transportation and communication networks.
6. How do large-scale industries differ from small-scale industries (SSIs)?
The primary differences between large-scale and small-scale industries are based on scale, investment, and technology. Large-scale industries involve huge capital investment (over ₹10 crores), use highly advanced machinery, and employ thousands of people. In contrast, SSIs require less capital, often use simpler technology, employ fewer people, and typically cater to local or regional markets. While large industries focus on mass production, SSIs often focus on niche products and local needs. Explore the role of small-scale industries to understand the contrast better.
7. What are the social and environmental impacts of large-scale industries?
Large-scale industries have significant and dual impacts:
- Positive Social Impacts: They are a major source of employment, lead to urbanisation with better amenities, and contribute to skill development in the workforce.
- Negative Social Impacts: They can cause displacement of local populations and lead to overcrowding in industrial areas.
- Negative Environmental Impacts: They are often a major cause of air, water, and land pollution due to industrial waste and emissions. They also lead to the rapid depletion of natural resources.
8. Why is achieving 'economies of scale' a primary goal for large-scale industries?
Achieving economies of scale is a primary goal because it is the core of a large-scale industry's business model. By producing goods in massive quantities, these industries can lower the average cost per unit. This happens because large fixed costs (like machinery and factories) are spread over a much larger number of products. Lower costs allow them to offer competitive pricing, capture a larger market share, and increase their overall profitability, which is essential for sustaining their large-scale operations. Read more about economies and diseconomies of scale here.
9. How has the rise of the IT and service sector changed the definition of a 'large-scale industry'?
The rise of the IT and service sector has broadened the traditional definition of a large-scale industry. Historically, this term was associated with heavy manufacturing, massive factories, and tangible assets. However, modern service giants like TCS or Infosys are considered large-scale based on different metrics:
- Market Capitalisation: Their financial value is enormous.
- Global Workforce: They employ hundreds of thousands of people worldwide.
- Revenue and Profit: They generate billions in revenue.
- Intellectual Capital: Their primary asset is knowledge and software, not physical machinery.
10. In what ways do large-scale industries contribute to a nation's infrastructure development?
Large-scale industries act as a catalyst for infrastructure development. To support their massive operations, they require robust infrastructure, which drives development in several ways:
- Transport Networks: They necessitate the construction of roads, railway lines, and ports to transport raw materials and finished goods.
- Energy Grids: Their high demand for power encourages the development of power plants and stable electricity grids.
- Urbanisation: The influx of workers leads to the development of housing, schools, and hospitals, creating industrial townships.
- Communication: They require advanced communication networks for their global operations, benefiting the entire region.
