Commercial Applications
Answer
Industry, commerce and trade are closely interrelated and interdependent. They cannot function effectively in isolation. The interrelationship can be explained as follows:
1. Industry Provides the Base for Commerce:
- Unless goods are produced by industry, there can be no distribution by commerce.
- Commerce depends on industry for the supply of goods to be distributed.
- No commercial activity is possible in the absence of industry.
2. Industry Depends on Commerce:
- Industry cannot function without commerce. Industrial production is meaningless without distribution of goods through commerce.
- Commerce provides essential support to industry by distributing goods among consumers and supplying raw materials to producers.
- If industry is the backbone of commerce, commerce serves as the lifeline of industry.
3. Industry and Commerce Provide the Base for Trade:
- Trade depends upon industry for the goods to be bought and sold.
- Trade also depends on commerce — the auxiliaries to trade (transport, banking, insurance, advertising) make trade possible.
- At the same time, trade provides support to industry by maintaining a link between producers and consumers.
4. Commerce Depends on Trade:
- Commerce includes trade as its main component. Without trade (buying and selling), commerce cannot exist.
- Auxiliary services like transport, warehousing and banking exist primarily to support trade activities.
Example: Consider the production and sale of cars —
- An automobile factory (industry) manufactures cars.
- Cars are transported to showrooms (transport, part of commerce).
- They are stored at dealerships until sold (warehousing).
- They are advertised through media (advertising).
- They are sold to customers (trade), with banks providing loans (banking).
- They are insured against accidents and theft (insurance).
Thus, there is a high degree of inter-dependence between industry, commerce and trade. The relationship can be shown as:
