Competently using data has proven to be the path towards success for many entities across different fields. In business, it meant competitive advantage, innovation, and profit. However, in order to achieve all these benefits, companies need to understand and take advantage of different kinds of data analysis and handling practices. One important distinction to be aware of is between primary data analysis and secondary data analysis. The importance of collecting new data is often and rightly stressed. So, let’s look closer at why it’s vital to utilize secondary data as well, and what benefits can come from analyzing secondary data.
What is secondary data?
As mentioned, when businesses collect data themselves, it’s considered primary data. So, what makes up secondary data? Simply because of the fact that it has already been collected by a primary source and is now being used by someone else (a secondary source) for their own purposes.
Likewise, primary research is when the data is collected by researchers themselves and is essentially new data. Conversely, secondary research or secondary data analysis is when analysts utilize data from previous research or outside primary sources instead of collecting data themselves.
Therefore, secondary data is any data that is already available before the research begins. Secondary data collection involves getting or buying data that has already been produced or recorded, instead of producing new data. More specifically, secondary data is information originally created and used by a primary source for a specific purpose that is then collected and analyzed by a second party.
Secondary data sources
Primary research is done with the data collected from authentic sources. This means that, for example, researchers conduct interviews or carry out field tests to get the data for the analysis.
Sources of secondary data, on the other hand, don’t need to be authentic. Any source information collected for whichever purpose can be a source for secondary data analysis. Naturally, this means that there are many such sources.
For businesses and other organizations, all these sources can be divided into internal and external. Internal sources are those that come from within the organization. For example, researchers may use existing data from accounting, customer feedback, or operational reports when doing marketing research to improve a firm’s marketing strategies. This data is still secondary as it was originally recorded for other purposes, but as it originates within the same company as the marketing research itself, it’s internal data.
All other sources, those that are outside of the organization, are external sources of secondary data. Of course, this group of sources is extensive and varies immensely. Here are some of the most common examples of such sources.
Face validity and content validity are similar in that they both evaluate how suitable the content of a test is. The difference is that face validity is subjective, and assesses content at surface level.
When a test has strong face validity, anyone would agree that the test’s questions appear to measure what they are intended to measure.
For example, looking at a 4th grade math test consisting of problems in which students have to add and multiply, most people would agree that it has strong face validity (i.e., it looks like a math test).
On the other hand, content validity evaluates how well a test represents all the aspects of a topic. Assessing content validity is more systematic and relies on expert evaluation. of each question, analyzing whether each one covers the aspects that the test was designed to cover.
A 4th grade math test would have high content validity if it covered all the skills taught in that grade. Experts(in this case, math teachers), would have to evaluate the content validity by comparing the test to the learning objectives.
The term "labor-intensive" refers to a process or industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods or services: the higher the proportion of labor costs required, the more labor-intensive the business.
Key Takeaways
- Labor intensive refers to a process or industry that requires a large amount of labor to produce its goods or services.
- Labor costs encompass all of the costs necessary to secure the human capital necessary to complete work.
- In labor-intensive industries, the costs associated with securing the necessary personnel outweigh the capital costs with regard to importance and volume.
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Labor Intensive
Understanding Labor Intensive
Labor-intensive industries or processes require large quantities of physical effort to complete necessary tasks. In labor-intensive industries, the costs associated with securing the necessary personnel outweigh the capital costs in regards to importance and volume. While many labor-intensive jobs require low levels of skill or education, this is not true of all labor-intensive positions.
Advances in technology and worker productivity have moved some industries away from labor-intensive status, but many remain. Labor-intensive industries include restaurants, hotels, agriculture, mining, as well as healthcare and caregiving.
Less developed economies, as a whole, tend to be more labor-intensive. This situation is rather common because low income means that the economy or business cannot afford to invest in expensive capital. But with low income and low wages, a business can remain competitive by employing many workers. In this way, firms become less labor-intensive and more capital-intensive.
Before the industrial revolution, 90% of the workforce was employed in agriculture. Producing food was very labor-intensive. Technological development and economic growth have increased labor productivity, reduced labor intensity, and enabled workers to move into manufacturing and (more recently) services.
As real wages rise in the economy, it creates an incentive for firms to invest in more capital to raise labor productivity, so the firm can continue to afford the cost of more expensive labor.
Special Considerations
A prime example of a labor-intensive industry is the agricultural industry. Jobs in this industry, which is closely related to the cultivation of foodstuffs that must be picked with minimal damage to the plant as a whole (such as fruit from fruit trees), are particularly labor-intensive. The construction industry is considered labor-intensive, as most of the required work is hands-on.
Even with the use of certain tools, a person must be involved with the vast majority of the work. Many positions that are part of the service industry are also labor-intensive. These positions include those within the hospitality industry and the personal care industry.
Labor costs encompass all of the costs necessary to secure the human capital necessary to complete work. These costs can include funds directed toward base wages, along with any benefits that may be given. Labor costs are considered variable, while capital costs are considered fixed.
Because labor costs can be adjusted during market downturns through layoffs or reductions in benefits, labor-intensive industries have some flexibility in controlling their expenses. Disadvantages of labor costs in labor-intensive industries include limited economies of scale, as a firm cannot pay its workers less by hiring more of them, and susceptibility to wage forces within the labor market.