Sector vs. Industry and How “Industry” Status Can Benefit Real Estate?

Sujan Afi S

Introduction

Although a number of people considered that industry and sector is same but it is not true. There is a slight but significant difference between them which significantly affect in their overall status. The change of status of from sector to industry may affect the overall rate of production. 

In this blog we will discuss the key difference between industry and sector. Further, in this blog we will also discuss how “industry” status can benefit Real Estate.

What is industry and sector?

Both industry and sector refer to various kinds of economic performances. But in generally industry refers to some specific group of companies or businesses which are engaged to the production of some specific products whereas the term ‘sector’ mainly used to refer the large sector of the economy. Industry describes specific economic activities while sector describes large portion of economic activities. In case of industry a series of companies generally operate in a similar business sphere but in case of sector there is a large number of companies which generally operate in a number of sphere. Industry is created by the breaking down of sectors.

Key difference between industry and sector

The key difference between industry and sector are describe below:

  1. Industry is a smaller portion of the whole economy whereas sector is a broad division of the whole economy.
  2. In industry a number of companies or firms involved in the production of similar kinds of products. Whereas in case of sector a number of industries are engaged in related or similar services or products.
  3. The basis of categorization is ‘process’ for industry but it is ‘business activities’ for sector.
  4.  The scope is comparatively narrow for industry than sector.
  5. Industry may be regional which indicates that it may be limited to a particular geographical location whereas sector always refers to broad section of economy which spread over a large geographical sphere.
  6. Industry has well defined activities and therefore constrict policies are generally observed for industry. But for sector the flexibility of policy is quite high because it refers to a broad portion of the whole economy.
  7. Management of companies under industry generally easier because it refers to a smaller portion of the economy where similar kinds of products are produces. But the management of sector is quite complex because it is bigger than industry and here a large number of industries are engaged in different enterprises.
  8. Example of industries are – manufacturing industry, extractive industry, genetic industry, construction industry etc. Example of sectors are – primary sector, secondary sector, tertiary sector etc.

How “Industry” status can benefit Real Estate?

The status of industry to the Real Estate can benefited in a number of ways such as –

  1. The status of industry of the Real Estate can increase the transparency of this sector.
  2. Approval process of residential sector will be simplify if the Real Estate sector get the industry status.
  3. The investors will get loans from various financial institutions in a hassle-free way when Real Estate sector received industry status. Even the interest rates also be subsidies.
  4. A large number of investors will be attracted to Real Estate when it received industry status and therefore large number of investors can be financing partners.
  5. If the RE get the industry status then it attract equity investment in Real Estate.
  6. Developers can feel relief when the Real Estate received industry status because at that time the developers can refinance their existing debts.
  7. More developer will attract to Real Estate sector when it received industry status because it would allow them the access to institutional credit and eventually it will help them to cutting their cost of borrowing for various residential projects.
  8. The cash flow problem of the builders will be reduce when the Real Estate sector will received the industry status because the rate of selling of property will be increase and the number of unsold property will be decrease in Real Estate if it received the industry status.
  9. The job opportunities will be increased in Real Estate sector and the construction costs will be lowered when the Real Estate get industry status.
  10. The land acquisition process in Real Estate will be simplified when it received the industry status.
  11. Developers can easily raise funds at lower rates for their various Real Estate projects when the RE get industry status.
  12. When the Real Estate received industry status then various financial institutions will give more priority to RE and hence the cash flow will be increased in Real Estate. 

Conclusion

There is a number of differences between industry and sector. Industry may be describe as a subset of a sector. If the Real Estate received industry status then it will bring a lot of opportunities to the sector. Both the investors and developers get benefitted when the Real Estate get industry status and thus the overall growth rate of RE will be increase.

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