Meaning of Economic and Non-Economic Activities

Introduction

Economic activities are at the core for an economy to survive. Categorizing economic and non-economic activities requires judging their objectives. Whirl economic activities have an economic return in mind, in the case of non-economic activities, no economic return is applicable. This tutorial discusses what economic and non-economic activities are, their characteristics, sectors of economic activities, and examples of some non- economic activities.

What are Economic Activities?

Economic activities are activities that are done for earning money and grow wealth. These activities are related to the production, distribution, and consumption of commodities and goods. Economic activities are performed with a profit motive in mind.

For example, economic activities include agriculture, business, consultation with doctors, lawyers, etc. Here it can be observed that all the professionals involved in these activities have a monetary motive behind their contribution. The farmer sells crops in the market, the businessmen earn a profit from business and doctors offer consultation in return for fees.

It is obvious that although the motive of economic activities is to earn money and acquire wealth, it is indispensable for the economy to run. Every professional in economic activities offers a service or a product that is necessary for the consumer. However, the magnitude of income from different economic activities is different. Still, economic activities are segregated from non-economic activities in the sense that there is no requirement of earning money in the case of non-economic activities.

Sectors of Economic Activities

There are different sectors where economic activities are performed which include the following −

Primary Sector

The primary sector of an economy is the most primitive and most traditional in nature. This sector deals with the production and extraction of raw materials and is mostly unorganized in nature. The professions that are considered in the primary sector include agriculture, fishing, forestry, grazing, mining, etc.

Secondary Sector

Products are produced from the raw materials resourced from the primary sector in the secondary sector of an economy. Construction, manufacturing, and processing tasks are included in this sector. Works included in the secondary sector include metal works, smelting, chemical and automobile engineering, etc.

Tertiary Sector

The tertiary sector is mainly involved in the services that are related to the economy. This includes the services required for the items sold in the secondary sector. Restaurant businesses, wholesale and retail sales, distribution, transportation of goods and services, etc. are included as tasks in the tertiary sector.

Quaternary Sector

The quaternary sector resembles the tertiary sector closely but it includes services that require intellectual activities. Examples of economic activities that are included in the quaternary sector are Information technology (IT), education, research, culture, etc. Most of the economic activities in India now belong to the quaternary sector.

Quinary sector

The quinary sector comprises top-notch executives in corporate and government services.

This is usually at the top of the professional pyramid of services.

Characteristics of Economic Activities

• Economic activities are done to profit and acquire wealth.

• Utilization of resources is required for economic activities to occur.

• Scarce resources are utilized rationally for maximum return in economic activities.

• Economic activities are bound by law. One cannot do illegal economic activities just to earn money.

• Economic activities must be socially applicable and acceptable.

What are Non-Economic Activities?

Non-economic activities are activities that are not done to earn a profit or money in return. There may be various social, religious, and community activities that do not have profit as a priority. These activities may be done for intangible benefits, such as love, satisfaction, and self-pride. However, economic activities may be related to non- economic ones when the latter makes an expenditure for the former.

Examples of Non-economic activities

• Undertaking charitable activities − Professionals may get involved in charitable activities without having any financial return in mind. Not-for-profit firms usually engage in such activities and one can volunteer in them which is a non- economic activity because there is no financial return in them.

• Religious and cultural activities − Like charitable activities, religious and cultural activities are done for spiritual and cultural satisfaction; not money in return. Hence, they are also non-economic activities.

• Leisure activities − Activities undertaken to engage in one’s hobbies and entertainment are non-economic activities because they do not have any economic return in mind. These activities are often done for mental satisfaction.

• Activities related to commitment to family − When a professional offers his/her services to family members, he/she does not earn any money from it. However, he/she does it as a commitment to his/her family members. Doctors offering consultation or a teacher teaching his/her own children are examples of such non-economic activities.

Characteristics of Non-Economic Activities

Self-satisfactory in Nature

The motive behind non-economic activities is not revenue or profit, but mental satisfaction. Many people engage in these activities to get the satisfaction that they cannot obtain from economic activities.

Moreover, for some individuals, monetary income is not the only motivation to get rejuvenated in life. These people often get engaged in non-economic activities for satisfaction.

Obligation or Compulsion

In many instances, non-economic activities are done for a social obligation or compulsion even when there is no monetary aspect related to the activities. People do not always look for monetary returns; social and community well-being can also be behind engagement with non-economic activities.

Zero Financial remuneration

The most striking aspect of non-economic activities is that there is no financial remuneration that can be gained by performing these activities. These tasks are either charitable, religious, or cultural in nature and they do not pay anything in return for the services performed for them. Hence, it is the will of the individual to participate in such activities because there is no financial return achievable from such activities.

Important Notes

• It is obvious from the above discussion that the difference between economic and non-economic activities is in their objective. While economic activities are performed for the objective to earn money, in the case of non-economic activities satisfaction or spirituality is the key.

• Another notable feature of economic and non-economic activities is that a person may be engaged with both at the same time. There is also no hurdle in the path with the number of organizations he/she is engaged in. It solely depends on the individual mindset and ability.

Conclusion

Both economic and non-economic activities are important for an economy. While economic activities offer money in return, non-economic ones do not. But, that does not mean that non-economic activities are useless. In some instances, non-economic activities can be a reason for large economic changes. For example, consider Shah Jahan’s love for Mumtaj which let him build an architectural wonder called the Taj Mahal. In this case, love is a non-economic activity but building the Taj mahal was probably a reason for the Mughal empire going bankrupt soon after Shah Jahan’s regency.

FAQs

Qns 1. What are economic activities?

Ans. Economic activities are activities that are done for earning money and grow wealth. These activities are related to the production, distribution, and consumption of commodities and goods. Economic activities are performed with a profit motive in mind.

Qns 2. What are non-economic activities? Describe briefly.

Ans. Non-economic activities are activities that are not done to earn a profit or money in return. There may be various social, religious, and community activities that do not have profit as a priority. These activities may be done for intangible benefits, such as love, satisfaction, and self-pride.

Qns 3. What is the point of difference between economic and non-economic activities?

Ans. The difference between economic and non-economic activities is in their objective. Economic activities tend to earn profits while non-economic activity does not.