Size of an industry depends on the capital invested, number of working labour and the quantity of production. Industries can be classified on the basis of size into three categories.
1. Cottage industries: It is the smallest unit of industries. The location of cottage industries is restricted to villages and mostly these are a household industry. It is mostly run by the family members. Cottage industries produce the goods to fulfil local requirements so, it needs a very little amout of capital and work with simple tools. These are mostly located in the houses of craftsmen itself. It can be operated by part time or full-time labour. These are engaged in the production of traditional goods like earthen pots, khadi goods, Cotton and coir mattress, handmade shoes etc.
2. Small – Scale industries: Small – scale industries are mostly located in urban or semi – urban areas, where there is dense population. Mostly, semi – skilled labourers work in this type of industries. The initial investment of capital is to the tune of 3 crore. Simple machines run by power are used to produce goods according to the demand of people living in wider areas. These types of industries are operated in an industrial area or complex. Small-scale industries are maintained in an organised manner. They are engaged in producing sophisticated goods like electric fans, iron, bulbs and television, etc.
3. Large – Scale Industries: Large – scale industries require different types of raw materials, means of power, huge market, skilled workers, high technology and much more capital. The origin of these industries took place after industrial revolution. In large scale industries, special attention is given to the quality of the product. These industries produce the best type of goods on large scale. Large – scale industries were intially setup in Great Britain, Western Europe, Russia, Japan, etc. Cement, cotton, iron-steel, petrochemical industries are some examples of large-scale industries.
