What is an emerging sector?

Emerging sector in business refers to an industry within an economy or a country that is in its initial stage of development, and is expected to grow rapidly in coming few years. The word sector may also be used for a group of industries. For example, economists generally divide all the industries in an economy in broad groups such as agricultural, manufacturing, and service sectors.

It is observe that every industry within an economy passes through a set pattern of growth and decline. When the industry is just founded and is in its infancy it experiences a very slow rate of growth, and its total size is also very small. As the industry develops the rate of growth slowly increases and over a period becomes very high. When the rate of growth is highest the size of industry is also substantial. After this stage the growth rate begins to taper down. At this stage the industry continues to grow in size, but at ever declining rate, till it reaches a maximum level when the industry is stagnant. Following this the growth rate becomes negative and the industry becomes passes in to stage of decline.

An industry will qualify as an emerging sector, when it is still small, but its growth begins to accelerate. The size of the industry is not yet big, but is expected to become so in near future. An industry qualifies as emerging sector, not only on the basis of its existing stage, but also on expectation of future growth. Thus it is not possible to identify emerging sectors of an economy with certainty. There are bound to be some disagreement among experts on the list of emerging sectors of an economy. I believe that some of the emerging sectors in Indian economy are organized retail, health care, insurance, and knowledge process outsourcing.