Manish Kothari
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Manish Kothari


A very huge segment of an economy is referred to as a sector and a specific and particular group of the entities or companies is termed as an industry and both these are usually used interchangeably to point out the group of companies or entities which operate in similar segments of an economy or they have the same kind of business.

Most of the crowd think that the term industry and sector are one and the same, as both terms are used to indicate those entities that either their business type are same and identical or operate in segments. 

This difference or variance pertains to the individual scope, a sector will be referred to a vast segment while the term industry can be described as a much more unique group of companies or business. In comparison, the term industry can be prescribed as an umbrella that covers all the organisations or firms that are engaged in a similar line of business activities or functions. 


Basic definitionIt can be used to define the group of entities or organisations that are engaged in the production of similar or related products or goods.
It is also a grouping of several enterprises or companies of an economy on the grounds of the business activities that they are involved in. The industry’s name will depend on the product or service in which the company deals in.
It can be described as the division of the complete economy, which can consist of the groups of businesses which are engaged in similar or related products or services. 
Further, it can be quoted that it is the subset of the complete economy, wherein the companies or entities will share the same or identical features, such as the processes or the operating activities or the product line that are identical.
ScopeSince it involves only a specific process, the scope is a bit narrow.Since it relates to business related activities, then the scope is wider
Basis of CategorizationThe method here to follow will be ProcessThe method here to follow is the business activities
Group/FormThe cluster of the industry can be defined through different firmsWhen industries are combined together, they form a sector
Sub classification
  1. Service industry 
  2. Genetic industry
  3. Extractive industry
  4. Manufacturing industry 
  5. Construction industry
  1. Primary sector
  2. Secondary sector 
  3. Tertiary Sector
  4. Quaternary Sector


  1. The classification of industries can be done on the basis of activities or the process performed by them. On the opposite side, the sector divides the complete economy into different segments based on the activities of business that are undertaken by the firms or companies.
  2. The firms clusters that are involved in the production or processing of the similar or same kind of products or services is called an industry. Whereas on the other side, the segment of an economy, into which different or various business segments that can be classified is referred to as a sector. 
  3. The term industry defines firms that are operating in a particular or specific segment, As contrary to this, the term sector is a broad term, which will include all those industries that are working in one specific or particular segment. 


It can be concluded that industry is a small and narrow term and is a subset of the broader term which is referred to as the sector. Investors and economists study those industries and sectors with an aim of understanding it better, which sector or industry will assist the progress and growth of the whole economy and which among them will prove to be highly profitable. 

It should be noted that you can find certain situations in which both the terms are benign reversed. But the common idea will remain identical: one breaks the complete economy down into a few particular segments while on the other sub divides those into more specific businesses. In the stock market, the generally accepted terminology is an industry more specific one and a sector as a wider classification.