Heavy Industry

An industry that produces massive industrial products

Author: Kassim Faour
Kassim Faour
Kassim Faour
Kassim Faour is a B2B SaaS specialist with a focus on ERP systems, mainly Odoo and SAP. He helps businesses and organizations implement digital transformation solutions that automates their functional departments such as Accounting, HR, Sales, Procurement, production, and more.
Reviewed By: Christy Grimste
Christy Grimste
Christy Grimste
Real Estate | Investment Property Sales

Christy currently works as a senior associate for EdR Trust, a publicly traded multi-family REIT. Prior to joining EdR Trust, Christy works for CBRE in investment property sales. Before completing her MBA and breaking into finance, Christy founded and education startup in which she actively pursued for seven years and works as an internal auditor for the U.S. Department of State and CIA.

Christy has a Bachelor of Arts from the University of Maryland and a Master of Business Administrations from the University of London.

Last Updated:December 8, 2023

What is Heavy Industry?

The heavy industry refers to an industry that produces massive industrial products. Unlike the light industry, these products are not sold directly to consumers but are usually produced and sold to large businesses or governments due to their capital-intensive nature. 

These industries are essential for the existence of a strong economic state. They work on large-scale and long-term projects, improving infrastructure, encouraging investments, and creating new job opportunities. 

Moreover, since these products are literally “heavy”, they carry high barriers to entry and have low transportability. This industry is cyclical and highly correlated with the business cycle. It profits from economic growth and suffers during downturns. 

These industries profit from economic growth since they are part of the supply chain of other products. That’s why their equity will often appreciate during an economic upturn with increased demand levels. 

The term “heavy” refers to the fact that this industry used to only produce products such as coal, oil, iron, ships, etc. However, today, this industry also refers to products that harm the environment, causing pollution, deforestation, etc.  

Key Takeaways

  • Heavy industry produces large-scale products and serves big businesses or governments due to high capital requirements.
  • It's vital for economic strength, contributing to infrastructure development, investments, and job creation.
  • Examples: Heavy industry includes aerospace, mining, shipbuilding, oil, and gas, among others.
  • It offers significant job opportunities and facilitates large-scale innovation but negatively impacts the environment and has high entry barriers.
  • Heavy industry is prominent in Asia (Japan, Korea), North America, and beyond, with a promising future despite environmental regulations due to increasing global demand for energy supplies and infrastructure.

Examples of Heavy Industry

These industries play an important role in a nation's economic growth and infrastructure development. Here is an expanded explanation of some of the key sectors within heavy industry:

  1. Aerospace: This industry is related to manufacturing aircraft and spacecraft used for commercial, industrial, and military applications. 

  2. Mining: This industry is related to the research and extraction of naturally occurring solid minerals in the earth. These minerals include coal, oil, iron, copper, zinc, etc. 

  3. Shipbuilding: This industry is related to the production of large ships and vessels. These ships are generally intended for trading and military purposes. 

  4. Oil and gas: This is a global industry and one of the most essential. It provides the fuel needed for transportation, heating, and primary materials used in construction, paving, and chemical extractions. 

  5. Chemical production: This industry is related to producing chemical products used for agricultural, pharmaceutical, construction, and manufacturing purposes. 

  6. Large buildings and infrastructure construction: Large buildings are used for various purposes such as businesses, government buildings, schools, hospitals, etc. Infrastructure includes all essential systems and facilities that aid in the daily activities of an economy and maintain/increase the standards of living, such as water supply, electricity, telecommunications, etc. 

  7. Machine tool building: These are corporations that build machine tools used for manufacturing other products. These products are usually sold to manufacturers, who also use them for manufacturing purposes. 

  8. Construction and transportation industries are today the most common types of heavy industry. These are mainly owned by large businesses due to their high production costs. 

  9. Automobile industry: Moreover, the automobile industry is not regarded as a heavy industry since its products are sold directly to consumers. 

Heavy Industries Advantages and disadvantages 

The heavy industry provides significant benefits, such as:

1. Job opportunities 

Since heavy industries are usually made up of massive scales of production, they tend to hire thousands of employees for each industry. They require various skills, hiring scientists, engineers, management personnel, unskilled laborers, and much more. 

2. Innovative projects 

Given that these industries are made up of large businesses, they tend to have the required funds, skills, and capabilities to perform large-scale and long-term projects, providing innovative inventions and solutions for a particular area or the whole world. 

The heavy industry was responsible for creating satellites, allowing people to watch the world using a TV in their homes. Moreover, they are responsible for mining minerals necessary to produce vital products. 

Not only did they help save the planet by introducing renewable energy sources such as solar panels and wind farms, but they are now exploring new planets to live in by investing in space crafts. 

Heavy industries are also responsible for manufacturing machinery, tools, equipment, facilities, etc.

All of these inventions aid in increasing global productivity, ultimately leading to the global growth of the economy. 

On the other hand, the drawbacks are:

Despite these many advantages, the heavy industry has some drawbacks 

1. Environmental impact

Due to production, these industries negatively impact nature through massive amounts of greenhouse gasses, oil spills, and water usage. Not only that, but they are also responsible for the high exploitation of resources to manufacture their products. 

2. Limited access 

Since these industries are capital intensive, they often have barriers to entry, making it challenging for some businesses to compete or even enter these markets. Effectively, these industries are controlled by a small number of powerful firms. 

Heavy Industry in the World Economy

It is vital in many countries’ economic cycles. Asian countries like Japan and Korea have some of the largest aerospace manufacturers and defense contractors. For instance, Subaru in Japan and Hyundai in Korea. 

Moreover, Asian communist nations often focus on improving and upgrading their heavy industries and regard them as major investment areas. This is because their international political relations are not so stable, and they feel the need to have their own power. 

They ensure they can always create tanks, trucks, aircraft, military equipment, and whatever they need to make the country a great power.  Additionally, due to the wide variety of minerals in the East Asian continent, China and Japan are two major steel and aluminum producers. 

However, the industry isn’t just in Asia; it’s also common in North America, where, previously, the Canadian government provided Bombardier with billions of dollars to develop their CSeries Aircraft.

The Future of Heavy Industry

Despite being a victim of strict environmental regulations, as more countries strive to decrease greenhouse gasses, the heavy industry will be one of the most important sectors in the future, even though the regulations will increase costs and decrease jobs in some sectors. 

The industry’s future is promising because more and more countries are demanding energy supplies, mining, construction, and, unfortunately, the need to make military equipment, tanks, trucks, etc. 

Moreover, the demand for solar panels, renewable energy plants, and the introduction of technological upgrades in the production process will increase demand even further. As a result, heavy industries are expected to plan long-term projects worth billions of dollars. 

Heavy Industry FAQ

Researched and authored by Kassim Faour | Linkedin

Reviewed and edited by James Fazeli-Sinaki | LinkedIn

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources: