How to find sources of profit
The main sources of profit change following the change in economic level. We are currently moving from the fourth economic level to the fifth. Accordingly, very soon only businesses that are engaged in creating goods and providing services of the fifth economic level can have a good profit.
The levels of the economy are called sectors. At present, there are 5 sectors: primary, secondary, tertiary, quaternary, fivefold. At different times, each of these sectors was the “locomotive of the economy” and gave wealth and power to the owner of the respective assets, acting as a source of profit, power and recognition.
With the change of the economic level, the distribution of power, sources of profit, the model of buyer behavior changed. Sometimes the power remained with the former people, if they had time to adapt, but very often completely different people came to replace them, because the former “powerful people of the world” could not always and wanted to adapt to new conditions.
Sources arrived before the 20th century
The first formed the primary sector of the economy, which includes agriculture and mining. The economy of human communities was actually based on the primary sector of the economy until the seventeenth century, and in some places later. Even now in Africa you can find communities that live on the first level of the economy.
It was the owners of the assets of the primary sector of the economy, and the land, agricultural land, forests, mines, etc., were the richest and most influential during the “reign” of this sector, because they controlled the sources of profit. These people constituted the elite and had the highest standard of living.
Next came the secondary sector of the economy, which includes the processing industry. The emergence of this sector marked the emergence of a new type of economy – the industrial economy. The people who owned the assets of this sector became the elite, because it was they who controlled the new sources of profit.
Sources of Profit of the 20th Century
XX century was marked by the emergence of a new sector of the economy. It is not difficult to guess that they became the tertiary sector, which was built over the secondary one. Sources of profits went to businessmen who owned the assets of this sector. This sector includes the production of services, technology, software and other intangible wealth.
This also includes logistics and optimization of financial flows, for example through offshore companies. Again, as with the previous change in the type of economy, all those who did not understand that it had changed were devastated. In addition, power passed to those who personified the tertiary sector. All those who could not adapt very quickly lost the previously acquired.
From about the 80s of the 20th century, the tertiary sector began to gradually lose ground, and in the last decade of this century it completely lost to the quaternary sector. Quaternary sector includes the creation of fundamental results, the formation of the level of skills of workers, as well as the commercialization of new ideas.
Sources of profit of the XXI century
Quaternary sector is now the most promising and profitable. But he did not have much time to dominate, because it is assumed that in 2020-2030 the five-fold sector, which is associated with the formation of motivation, will take the first place. But so far, the quaternary sector is still dominant. All sources of profit are in it.
It is due to this sector that the first three sectors of the economy, which became unprofitable everywhere, are subsidized. In general, if we consider the economy on a global scale, then a quite distinct pattern is found. It is manifested in the fact that the business associated with the primary sector, after it lost its value, became unprofitable everywhere.
In developed countries, we see huge amounts of subsidies to agriculture and extractive industries. If we consider countries based on the primary sector of the economy, and these are African countries, some countries of Latin America and even the CIS, then it is obvious that they are actually subsidized by countries that are most economically developed.
Grants as sources of profit
A similar situation has emerged recently in the industrial sector of the economy. Industrial sectors of the economy in the developed countries of the world, in fact, are also subsidized. Take, for example, the automobile industry, the symbol of the industrial age. So now it has been subsidizing billions of US dollars since the end of the 70s.
The only exceptions are companies that have post-industrial elements. They retained their profitability, but in fact the industrial part of these companies is subsidized by the post-industrial part. One of the best examples is Porsche, which earns more than others from the sale of one car due to the post-industrial component.
In the modern economy, the main sources of profit are in the quaternary sector. However, in some industries, the tertiary sector still makes a profit. Within its framework, the products are: software, qualified services, technology, mass culture products, finance, including the world reserve currency – the US dollar.
Real Sources of Profit
It is precisely due to the profits received in the high sectors of the world economy that the lower sectors of the economy are subsidized, and on a global scale. This means that more developed countries subsidize less developed ones. Subsidies occur because there is a need for products in low sectors, even despite the fact that their production does not bring profit.
In the countries of the former USSR, it all happened so that representatives of the secondary, ie industrial sector of the economy. Such companies were the overwhelming majority, and, therefore, the norm was to assume that industry, and in some places agriculture, is the most productive force. That was a big mistake.
For a while, industry and agriculture still yielded some profits, but they all decreased and decreased. This is the reason for the current business problems based on outdated premises. In fact, such a business has to work with the fact that it does not make a priori profit. Revenues bring, but no profit.