We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Economy

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Is an Essential Industry?

Malcolm Tatum
By
Updated: May 16, 2024

An essential industry is any industry that is considered crucial to the stability of the economy within a nation. In order for an industry to be considered essential, it must produce goods and services that are important to keeping the economy somewhat stable, both during peacetime as well as when the nation involved is at war. Essential industries will vary somewhat from one scenario to the next, although there is a core group of industries that are likely to be considered key to economic stability at any time.

The broader approach to an essential industry not only calls for the inclusion of all companies that produce specific goods and services related to an industry identified as essential, but also all companies that supply raw materials to those producers. For example, if the textile industry is considered to be essential to the economy of a given nation, then businesses that manufacture textile machinery or provide support materials such as bobbins, cones, and raw fiber for the production process would also be included in the assessment. This approach allows for recognizing the importance of those supporting companies and industries and the role those entities play in keeping the economy stable.

Defining what does and does not constitute an essential industry can be somewhat difficult. The effort calls for identifying specific criteria to determine the impact of those industries on the overall economy. Typically, if the loss of that industry would seriously cripple the economy and open the door for some sort of severe economic downturn, such as the onset of a recession, there is a good chance that the industry is in fact essential. In addition, if the loss of the industry would constitute a significant decrease in the standard of living for citizens within that nation, that industry is most likely classed as essential.

Two of the essential industry types that are usually included in just about any identification of crucial industries are gas and steel. Shortages of either product could seriously damage an economy, creating a great deal of economic hardship for consumers as well as businesses. Electricity is also considered essential in many settings, owing to the dependency of most companies, as well as households, on this type of service.

Determining the status of what constitutes an essential industry and what does not may change somewhat, depending on how the economy of the nation is structured, as well as what type of political and other events are occurring. It is not unusual for some industries to be classed as essential during wartime, but lose that status during periods of peace. In addition, emerging technology may render a formerly essential industry as non-essential to the newer economic conditions. For this reason, economists and analysts can and do adjust listings of essential economies from time to time.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
Share
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.