The economy of any country consists of production and non-production spheres.
PRODUCTION SPHERE - a set of branches of material production in which material goods are created - means of production, consumer goods.
TO material production can be attributed primarily to industry, agriculture, trade, construction, a number of specific industries that produce material products - publishing, film studios, recording enterprises and other types of activities .
Indicators characterizing the production sector: the number of employees in general and by industry, the volume of production of means of production and consumer goods, their shares; production of certain types of the most important products, oil, gas, metals, engineering products, grain collection, other types of agricultural products, etc. An indirect indicator of the efficiency of the production sector is the indicator of labor productivity in general and by industry.
NON-PRODUCTION SPHERE- a set of industries whose products act in the form of a certain purposeful activity (intellectual product, service, etc.). Most industries included in this area are directly related to meeting people's needs for intangible products or services. It includes the following sectors: education, healthcare, culture, art, fundamental science and scientific services, physical education and sports.
The development of the non-production sphere reflects the development of social needs, changes in their structure as the standard of living of the population increases. In all industrialized countries, in connection with the deployment of scientific and technological revolution since the middle of the 20th century. A block of intangible industries, whose products were aimed at developing the human factor, clearly emerged and began to develop dynamically.
The main structural elements of the national economy are industrial complexes and branches of the national economy. The relationships between these structural elements are called economic structure.
Industry– a set of enterprises producing (extracting) homogeneous or specific products using similar technologies. Moreover, this set may include various enterprises that produce a product from beginning to end at a given enterprise, and organizations that each engage in their own activities, but ultimately produce a solid product (automotive industry).
According to Russian legislation, an economic sector includes all Russian producers of a similar product or a directly competing product, or those of them whose share in the total volume of production in the Russian Federation, respectively, of a similar product or a directly competing product is the largest.
There are:
1. pure industries producing a single product (for example, the coal industry);
2. economic sectors in which the majority of industry organizations are engaged in the production of industry products;
3. administrative branches, the organizations of which belong to one ministry or department.
The sectors of material production include industry, agriculture and forestry, construction, transport and communications, trade and public catering, logistics. The sectors of socio-cultural orientation and service sectors include: culture, education, healthcare, social security, science, management, housing and communal services, consumer services. It is legitimate to distinguish the banking sector and activities related to information technology as economic sectors
Industry complex- a set of enterprises or industries that together fully provide the national economy with any product or service. Complexes can develop within one industry or between different industries. For example, the fuel and energy complex includes enterprises in various industries that extract, process, supply and sell oil, gas, and other types of fuel; generate and transport electrical energy.
The agrarian-industrial complex also includes both agricultural enterprises (crop growing, livestock farming, etc.), as well as food industry enterprises (which process the bulk of agricultural products), light industry (which processes the rest of agricultural products), chemical industry (fertilizer production).
An element of general infrastructure that is not directly connected to the production process. This includes higher and school education, personnel training, health care issues, and so on.
Non-productive (social) infrastructure- a group of institutions (enterprises, facilities, buildings) that provide the livelihoods of the population and normal conditions for the production of a citizen. Non-productive infrastructure makes it possible to form an intellectually and physically developed society in which each individual will be active and capable of performing various tasks.
Non-production infrastructure- a set of activities and economic sectors that help cover social and personal needs of a person through the provision of certain services.
The essence and structure of non-productive infrastructure
The main feature of the allocation of non-production infrastructure to a separate branch means that:
Infrastructure creates general and optimal conditions for social reproduction;
- has a complex structure, which has its own objects, links and parts.
Each non-production (social) infrastructure object was built with the aim of creating optimal conditions to meet the specific needs of the population, society as a whole and production processes.
Non-production infrastructure can be divided into two parts:
- social and household. Its goal is to create optimal conditions for the reproduction of every person (citizen) from the position of a biological being, that is, through the everyday environment. This may include elements such as trade, catering, consumer services, housing and communal services, and so on;
- socio-cultural. Here the main emphasis is on the development of the intellectual and spiritual properties of the individual, strengthening his physical fitness, as well as the formation of the necessary level of activity that meets the needs of society as a whole. In this sector, the main attention is given to such branches as education, art and culture, sports, places of worship, and so on.
In terms of its role as an economic category, non-productive infrastructure is a reflection of production relations related to the creation of optimal conditions for life and economic development of the country as a whole. That is, the main goal is social reproduction.
Efficiency of non-production infrastructure when creating such conditions, it largely depends on the existing potential in the economy, which is determined by the current state, the availability of appropriate resources, and so on.
Basic elements of social infrastructure - a set of key assets, which include structures, buildings and communications, as well as their technical equipment. The total cost of fixed assets of non-productive infrastructure, as a rule, is about 30-40% of the assets of the economy of the country as a whole or of an enterprise (if we are talking about the non-productive infrastructure of a particular company).
All objects differ in approach, which allows us to divide non-production infrastructure into three main blocks :
Infrastructure associated with intellectual, political, social and cultural activities. This includes various public organizations, associations, educational and cultural facilities, work in the media, and so on;
Infrastructure aimed at strengthening, preserving and restoring the physical component of society (its health) - security, tourism, social security, sports, culture, and so on;
Infrastructure in the field of consumer and public services - passenger transport, catering, communications, and so on.
Into the social (non-production) infrastructure of the enterprise
includes such facilities as medical centers and clinics, buffets and canteens, consumer service institutions and homes, institutes and vocational schools, nurseries and kindergartens, gyms and stadiums, recreation centers and sanatoriums, clubs and libraries.
Non-production infrastructure: functions, financing
All functions of social infrastructure can be divided into two categories: :
1. Global functions, which imply meeting the objectives of society as a whole, namely:
Creating optimal conditions for demographic development;
- reproduction of the workforce that meets the level of development and production needs;
- effective use of available labor resources;
- maintaining (improving) the physical health of people;
- ensuring normal living conditions and living conditions for people;
- improving and maintaining public health;
- optimizing people's use of their free time.
2. Functions of non-production infrastructure at the enterprise level are as follows:
Making changes to the gender, professional, age and professional structure of the team, reducing the turnover of specialists and increasing the general level of education;
Reducing the risk of injury in the production process, preventing various diseases associated with the intricacies of the activity;
Improving the living conditions of each of the enterprise’s employees, as well as improving the quality of cultural and social services (construction of child care facilities, housing, and so on);
Optimization of working conditions, namely reducing vibrations, gas pollution, dust, and so on, maintaining working capacity for a long time;
Performing tasks to develop people’s creative and labor activity;
Solving emerging social problems that may go beyond the boundaries of each specific enterprise.
The development of non-production infrastructure includes solving the following tasks:
Solving housing problems that affect the broadest segments of the population;
Optimizing the development of social infrastructure, as well as increasing its level;
Creating an optimal cultural sphere of life, as well as improving environmental living conditions;
Increasing the volume of services and goods, as well as increasing the productivity of each individual employee;
Formation of optimal guarantees that ensure social security of all groups of the population (including youth);
Covering people's needs for services and goods while increasing the solvency of citizens.
At the same time, one of the main issues is quality financing of non-productive infrastructure facilities . This branch can be differentiated into two types:
Industries that operate and develop using their own resources. In this case, the focus is on generating income from activities and self-financing. This includes consumer services and catering;
Industries that operate at the expense of various consumer funds (collective, territorial and centralized).
Recently, the sphere of non-productive services has become self-financing, which allows us to conclude that the level of satisfaction of society's needs is low. The result of this phenomenon is the restriction of funding in the field of preferential and free services, cost reduction, and so on.
In practice, financing of non-productive infrastructure has always occurred through two main channels - sectoral or territorial. At the same time, the quality of development of the social sphere depends on the extent to which each of the sectors can achieve self-sufficiency with the necessary resources to cover existing tasks.
The industry principle has its downsides. Thus, non-comprehensive use of subordinated facilities leads to the dispersion of available capital. At the same time, the subordination of each of the structures (objects) to various organizations complicates the process of solving non-production problems. It is much simpler if the issue is under the control of a separate enterprise, which on its own covers the social security needs of workers.
As for the territorial funding channel, it is largely supported by the local city budget. The disadvantage here is obvious - limited resources, which impedes the normal development of non-production infrastructure.
Often the budget is not able to cover the main tasks of society in the social sphere. On the other hand, it is the state that must take on the functions of protecting the interests of citizens and disadvantaged segments of the population in particular. It is the task of the state to ensure that citizens receive the full volume of services. That is why a complete transition of facilities to independent financing of this section of infrastructure is not yet possible.
The optimal option seems to be the coexistence of several fixed assets - at the state level, federal and private funds, as well as objects with a territorial structure. The main role in solving the main problems is given to companies that can take on most of the costs of maintaining these facilities, their reconstruction and construction of buildings.
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The production sphere is a set of branches of material production in which material goods are created - means of production, consumer goods. The production sector includes industry, agriculture and forestry, construction, transport, communications, energy, trade, public catering, warehousing, a number of specific industries that produce material products - publishing, film studios, recording enterprises, design organizations, fruit procurement , mushrooms, berries, seeds, wild herbs and their primary processing, etc. The production sector includes services. The production sphere includes a significant part of scientific activity, which is directly embodied in material goods: design and engineering organizations, experimental and pilot production, biological stations, biological laboratories, design and survey organizations for deep drilling for oil and gas, etc.
The development of the division of labor, the emergence of new industries and industries producing material products, the transformation of science into a direct productive force, the transformation of material production into knowledge-intensive production make the border between the production and non-production spheres very mobile.
The issue of industries producing military products remains unresolved, since the final use of the product of these industries is associated with military operations.
Indicators characterizing the production sector: number of employees in general and by industry, volume of production of means of production and consumer goods, their shares; production of certain types of the most important products, oil, gas, metals, engineering products, grain collection, other types of agricultural products, etc. An indirect indicator of the efficiency of the production sector is the indicator of labor productivity in general and by industry.
The distinction between the spheres of human activity into production and non-production is methodologically based on Marx’s teaching on productive and unproductive labor, on the theory of surplus value. In the USSR, this distinction was used in statistical accounting of the volume of the total social product and national income. The initial methodological premises for such a calculation were the following: a) surplus product is created in the branches of the production sphere; b) the non-production sphere is supported by the surplus product redistributed from the production sphere through the state budget and the personal income of citizens paid for services.
In the statistics of countries with developed market economies, a distinction is not made between the production and non-production spheres.
The non-productive sphere is a set of industries whose products act in the form of a certain purposeful activity (intellectual product, service, etc.). Most industries included in this area are directly related to meeting people's needs for intangible products or services. It includes the following sectors: education, healthcare, culture, art, fundamental science and scientific services, physical education and sports, social security, including various types of social services, management, etc.
The development of the non-production sphere reflects the development of social needs, changes in their structure as the standard of living of the population increases. In all industrialized countries, in connection with the deployment of scientific and technological revolution since the middle of the 20th century. A block of non-material sphere industries clearly emerged and began to develop dynamically, the products of which were aimed at developing the human factor: education, healthcare, social services, etc. The share of people employed in the service sector currently reaches 70%.
In Russia, not much more than 30% are employed in the non-production sector. Although the data are not comparable with foreign statistics.
The distinction between spheres of activity into production and non-production was methodologically based on Marx’s teaching on productive and unproductive labor and was applied when taking into account the volume of the total social product and national income. It was believed that labor employed in the non-productive sphere does not create a surplus product, and the non-productive sphere is maintained through redistribution from the production sphere.
In the USSR until 1989 non-production sectors were taken into account only in the expenditure side of the consumption fund. In the statistics of countries with developed market economies, no distinction is made between the production and non-production spheres.
Currently, in Russia it is recognized that labor in non-production sectors is productive, creates value and surplus value, the volume of production of industries in this sphere, according to a special method, is included in the total value of the gross domestic product (GDP) and the gross national product (GNP).
Industry- a set of enterprises characterized either by the unity of purpose of the products produced, or by the commonality of technological processes, or by the homogeneity of the processed raw materials.
The emergence and death of industries and economic complexes is due to the development of the social division of labor. Highlight three shapes social division of labor.
General division of labor expressed in the division of social production on sectors of the national economy: industry, agriculture, construction, transport and communications, trade, logistics, science and scientific services, healthcare, culture, education, financial sector, etc.
Private division of labor expressed in education independent industries within industry, agriculture and other sectors of the national economy (for example, agricultural engineering).
Unit division of labor manifests itself in the division of labor directly at the enterprise (organization).
Due to the concentration of production and technological progress, the unit division of labor influences the emergence of new industries (for example, the production of microchips, mobile phones).
Main signs that distinguish one industry from another are: the economic purpose of the products produced; the nature of the raw materials and materials consumed; technical production base and technological processes; professional staff. For example, mechanical engineering is intended to produce means of labor; food industry – food products; the metallurgical industry has a common technological process; wood processing industry – a community of processed raw materials. The formation of an industry is also determined by a sufficiently large market for a given type of product or the availability of appropriate natural resources (oil, gas, coal, timber, etc.).
In some industries (industry, agriculture, construction, forestry) goods are produced, in others – services(transport and communications; trade and catering; logistics and sales; housing and communal services and consumer services; healthcare, physical education, social security; education; culture and art; science and scientific services; finance, credit, insurance; control).
Enterprises can be part of industries and economic complexes.
Economic complex– a group of interrelated industries, sub-sectors, enterprises producing products of a single nature. For example, the engineering complex; agro-industrial complex (AIC), military-industrial complex (MIC), fuel and energy complex (FEC), construction, chemical forestry, social and consumer complexes, etc.
4. Production and non-production spheres of the national economy
The national economy is usually divided into production And non-productive sphere.
TO production sector include industries that produce goods and services that provide the basic, primarily material, needs of the population and economic entities. These are industry, agriculture, construction, freight transport, communications, trade, public catering, logistics and other sectors.
TO non-production sphere include industries that create conditions for the efficient production of material and intangible goods. These are science, education, healthcare, culture and art, finance, insurance, public administration, etc.
Industry− a separate sphere of science, knowledge, production. Branch of the economy - a set of enterprises producing (extracting) homogeneous or specific products using similar technologies.
All sectors of the national economy are divided into two large areas:production And non-productive. The existence of organizations belonging to the second group (culture, education, consumer services, management) is impossible without the successful development of enterprises of the first.
Enterprises that carry out activities aimed at creating material wealth belong to the industry of the production sector. Also, organizations in this group carry out their sorting, movement, etc. The exact definition of the production sector is as follows: “A set of enterprises that manufacture a material product and provide material services.”
The production sector plays a very significant role in the development of the national economy. It is the enterprises related to it that create national income and conditions for the development of intangible production. There are the following main branches of the production sector: industry, agriculture, construction, transport, trade and catering, logistics.
1 Industry. This industry includes enterprises engaged in the extraction and processing of raw materials, equipment manufacturing, energy production, consumer goods, as well as other similar organizations that are a major part of such an area as the manufacturing sector. Sectors of the economy related to industry are divided into:
− electric power industry. The enterprises included in this group are engaged in the generation and transmission of electrical energy, as well as control over its sales and consumption. The production of products of any kind without organizations carrying out similar activities is impossible.
− metallurgy. This industry, in turn, is divided into two sub-sectors: non-ferrous and ferrous. The first includes enterprises engaged in the extraction of precious metals (gold, silver, platinum), diamonds, copper, nickel, etc. Ferrous metallurgy plants produce mainly steel and cast iron.
− fuel industry. The structure of this industry includes enterprises engaged in the extraction of coal, oil and gas.
− chemical industry. Technological production of this type produces products for a wide variety of purposes. The latter can be divided into four main categories: basic and specialty chemicals, consumer goods, and life support products.
− forestry industry. This group includes enterprises that harvest logs, produce lumber, as well as paper, pulp, matches, etc.
− mechanical engineering and metalworking. Factories in this area are engaged in the manufacture of equipment, tools and machines.
− light industry. Enterprises of this group produce mainly consumer goods: clothing, shoes, furniture, etc.
− building materials industry. The main activity of factories and combines in this industry is the production of products intended for the construction of buildings and structures (concrete mixtures, bricks, blocks, plasters, insulation, waterproofing, etc.
− glass industry. The structure of this industry also includes factories for the production of porcelain and earthenware. Enterprises in this sub-industry produce dishes, sanitary ware, window glass, mirrors, etc.
All industrial enterprises are classified into two large groups:mining– mines, quarries, mines, wells; processing– combines, factories, workshops.
2 Agriculture. This is also a very important area of the state’s economy, falling under the definition of “production sector”. Branches of the economy in this area are primarily responsible for the production and partial processing of food products. They are divided into two groups: livestock farming And crop production.
The structure of the first includes enterprises engaged in:
− cattle breeding. Raising large and small livestock makes it possible to provide the population with such important food products as meat and milk.
− pig farming. Enterprises of this group supply lard and meat to the market.
− fur farming. The skins of small animals are mainly used to make wearable items. A very large percentage of these products are exported.
− poultry farming. Agricultural enterprises of this group supply the market with dietary meat, eggs and feathers.
Crop production includes such sub-sectors as:
− growing grains. This is the most important sub-sector of agriculture, the most developed in our country. Agricultural enterprises of this group of production sphere are engaged in the cultivation of wheat, rye, barley, oats, millet, etc. The degree of provision of the population with such important products as bread, flour, and cereals depends on how effectively this industry will be developed.
− vegetable growing. This type of activity in our country is carried out mainly by small and medium-sized organizations, as well as farms. Fruit growing and viticulture. Developed mainly in the southern regions of the country. Agricultural enterprises of this group supply fruits and wines to the market.
Sub-sectors such as potato growing, flax growing, melon growing, etc. also belong to plant growing.
Industry and agriculture are considered the main sectors of the production sector. However, an equally important role in the country’s economy is played by enterprises and other groups that are in close cooperation with them.
3 Construction. Organizations of this group are engaged in the construction of buildings and structures. These can be objects for domestic purposes, as well as cultural, administrative or industrial. In addition, construction organizations develop designs for buildings and structures, carry out their reconstruction, expansion, major repairs, etc.
Absolutely all other branches of the production sector interact with groups of enterprises of this type. Construction companies can work both on government orders and on behalf of specific organizations or individuals.
4 Transport. Organizations in this area of the national economy are responsible for the transportation of raw materials, semi-finished products and finished products. It includes the following industrial sectors:
− road transport. Companies in this group mainly deliver goods over short distances.
− marine. This type of transport mainly carries out foreign trade transportation (oil and petroleum products). In addition, maritime companies serve remote areas of the country.
− rail transportation. Within the developed economic zone, trains are the main transport that delivers goods over long distances.
− aviation. Companies in this area of the transport industry are mainly engaged in the transportation of perishable products.
The success of the functioning of enterprises in such industries as agriculture, industry, construction, etc. directly depends on the efficiency of the transport group companies. In addition to those discussed above, this area of the production sector includes organizations transporting oil, its products, gas, etc.
5Trade. An equally important role in the country's economy is played by such industrial sectors as: wholesale trade; retail; catering.
Its subjects are enterprises and organizations involved in the sale of goods produced by industry and agriculture, as well as related work and services. Catering establishments include canteens, kebab shops, cafes, restaurants, pizzerias, bistros, etc.
6 Logistics support. The main activity of the subjects of this branch of the production sphere is providing for industrial enterprises, agriculture, etc. working capital: components, packaging, spare parts, rapidly wearing equipment and tools, etc. The logistics group also includes organizations involved in supply and sales. Thus, the branches of the production sphere, the definition of which was given at the beginning of this article, are the most important components of the national economy. The effectiveness of the development of the country’s economy as a whole and, as a consequence, the growth of the well-being of its citizens directly depends on the success of the activities of their enterprises.
In the non-production sector, two groups of industries can be distinguished:
1. Industries whose services satisfy the general, collective needs of society:
− geology and subsoil exploration and water management (except for those activities that were classified as material production);
− authorities: administrative apparatus, court, prosecutor’s office;
− defense;
− party and public organizations;
− science and scientific services;
− finance;
− lending and state insurance.
2. Industries whose services satisfy the cultural, everyday and social needs of the population:
− housing and communal services;
− institutions and enterprises providing consumer services to the population (passenger transport, baths, hairdressers, etc.);
− education (schools, secondary and higher educational institutions, libraries, etc.);
− cultural and art institutions (museums, theaters, cinemas, palaces, cultural centers, etc.);
− communications regarding services to the population and non-production sphere;
− institutions providing medical services to the population (clinics, hospitals, sanatoriums, etc.);
− physical culture and sports institutions;
− institutions for social welfare of the population.
Workers employed in the non-productive sphere of the national economy do not produce material goods, but their work is necessary for society and is socially useful work.
Sometimes outside the classification of industries in the production and non-production spheres, the industry "Public services" distinguished as a collecting industry, which includes enterprises included in the branches of the production and non-production spheres. From the production sector, this includes industrial enterprises that manufacture and repair personal items according to individual orders of the population, and construction organizations that construct and repair housing according to individual orders of the population. From the non-production sphere, the collective sector of consumer services for the population includes non-production activities that have the nature of purely consumer services for the population (baths, hairdressers, etc.).