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Heavy Industry

An industry that produces large and heavy products, requires large and heavy machinery and facilities, and involves complex production processes

What is Heavy Industry?

Heavy industry refers to an industry that produces large industrial products, which requires large and heavy machinery and facilities and involves complex production processes.

 

Heavy Industry

 

Heavy industry is dominated by large companies, as it is very capital intensive and requires significant investment in heavy equipment, massive buildings, large machine tools, and extensive infrastructure.

As opposed to the light industry – which is less capital intensive and sells products to consumers – heavy industry sells its products to large purchasers such as businesses, industries, and governments. It is also usually more cyclical in both investment and employment.

 

Examples of Heavy Industry

Common examples of heavy industry include:

  • Aerospace
  • Shipbuilding
  • Mining
  • Machine tool building
  • Locomotive manufacturing
  • Oil and gas
  • Steel production
  • Chemical production
  • Construction of large buildings and infrastructure

 

Since the Industrial Revolution, the transportation and construction industries and their associated upstream manufacturing supply businesses have comprised the bulk of heavy industry.

Certain capital-intensive industries, such as automobile manufacturing, are not typically considered heavy industry because consumers are the primary purchasers of their products.

 

Benefits of Heavy Industry

Heavy industry provides employment to millions of people around the world. Due to the massive scale of production, individual facilities may employ tens of thousands of people. Companies within the industry require a diverse range of skills and occupations to make their businesses work. Engineers, scientists, management personnel, low-skill laborers, and many others are employed in heavy industry.

Heavy industry is also responsible for many important innovations. The production of satellites, the exploration of space, the ease of global travel, and the introduction of renewable energy methods such as wind farms are all due to the work of heavy industry. Furthermore, it produces many of the machinery and tools needed in other sectors of the economy.

 

Downsides of Heavy Industry

Due to the nature of its products and production processes, heavy industry exerts a significant environmental impact. It accounts for about 22% of global greenhouse gas emissions and features other problems such as chemical leakage, oil spills, and expansive water usage. The building of massive facilities required in heavy industry can also result in the displacement of various animal species and even people.

Heavy industry also requires significant capital investment, resulting in barriers to entry that are often quite high. Therefore, market power within most heavy industries is concentrated in the hands of a small number of dominant firms.

 

Heavy Industry in the World Economy

Heavy industry is a key part of many Asian countries’ economies due to government economic policy. Several metallurgic industries are located in East Asia, including steel and aluminum, due to the wide variety of mineral resources in the region. China and Japan are the two top steel producers globally, while Japan and South Korea are known for their aerospace and defense manufacturing.

In North America, heavy industry is also very important. In the past, Canadian aerospace giant Bombardier received billions of dollars in subsidies from the Canadian government in an effort to help the company develop its CSeries aircraft. Boeing, one of the world’s largest aerospace manufacturers and defense contractors, also obtained millions in non-repayable federal grants and billions in federal loans and loan guarantees from the U.S. government between 2000 and 2014.

 

The Future of Heavy Industry

As more and more countries strive towards achieving net-zero greenhouse gas emissions, heavy industry will become the target of increasingly stringent environmental regulations. It will raise the already significant costs associated with the industry and may result in job losses in certain sectors.

Nonetheless, demand for energy, construction, mining, and other heavy industry will continue to grow as the global population grows through the 21st century. The transition to a cleaner future involves constructing environmentally-friendly buildings, the introduction of renewable energy plants, including solar farms and wind turbines, and the implementation of technological innovations in heavy industry’s production processes. Heavy industry will play an increasingly important role in the global economy, and new opportunities will arise.

 

Additional Resources

CFI offers the Commercial Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below:

  • Business Life Cycle
  • Labor Market
  • Intelligent Manufacturing System (IMS)
  • Telecommunications Industry

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