Difference Between Factory and Industry (With Table)

These are common business terms that are often confused with each other. Both the words factory and industry are referenced with places of production. Factories and industries are tasked with the making of an object or a product that reaches wholesalers, retailers, and customers, eventually. They are used in proportion to a large quantity.

Factory vs Industry

The main difference between factory and industry is that while factory refers to a physical location or site that produces or makes products or deals with business procedures, industry, on the other hand, refers to a collection of businesses that are tasked with manufacturing the material for trade and or providing services.

The factory is a term used to denote a place where things are made by people, typically using the aid of machines. These are locations or sites that undertake any business procedures. Factories are listed under industries, and therefore are a narrower concept than their counterpart. A simpler distinguishment of the term can be said that factory refers to an individual term.

The industry is a word that is used in reference to the work or process of making things in factories. They include all the companies that make the same product or material. Therefore, the word industry is coined to be known and regarded as a concept. The notion is a much wider one than factories. Thus, the industry is a collective term.

Comparison Table Between Factory and Industry

Parameters of Comparison




Factory refers to a site or a location where things are made with the help of machines.

Industries refer to the process of producing in factories.


The major purpose of factories is to facilitate the production of consumer goods.

Industries help in the classification of different businesses and in the calculation of GNP.


Factories come under industries.

Industries are a concept or a notion.


Job shops, electronics, metal, chemicals, petroleum, etc.

Primary, secondary, tertiary. Quaternary is also considered a type.


A factory has a narrow scope.

The industry has a wider scope in comparison.

What is a Factory?

A single building or a number of buildings within which goods are produced or manufactured is termed a factory. These goods are produced with the aid of machines and labor. 

The goods thus produced contain an economical value. Therefore, a fixed location is procured for the seamless production of goods that carry value. This location or site comes to be known as the factory wherein the goods are produced.

A factory is known by other names such as a manufacturing plant, manufacturer. Inside factories, the laborers are expected to produce products using raw materials or assemble products with the help of several different machines.

Factories also play a vital role in helping enhance cordial relationships between the owners and the employees or laborers. This is a must for the efficient functioning of the factory and the production process to continue seamlessly.

Factories gained momentum with the Industrial Revolution when the world started demanding goods in larger supplies. This paved the need for the rising number of factories. 

Factories come under industries. Therefore, factories are a much narrower concept. 

Factories help in the production of goods, consumables, and products for final or intermediate consumption that ultimately contributes to the GNP of the country and its growth and development.

All production takes place in factories. This gives birth to several different types of factories. Every different sector such as pharmaceuticals, fertilizers, electricals, makes up different factories.

What is an Industry?

An industry is a term that is used to signify a collection of businesses that are tasked with the manufacturing of material and providing services. Put simply, they point out all the companies that make the same thing.

Industries are a sum total of a concept of a notion. Therefore, they play a critical role in factoring several economic theories. They come under the branch of economics that deals with goods, services, and raw materials being produced.

Due to their collective term and the idea of a notion or concept, industries have a wider spectrum and scope. They also contain factories in their circle.

The primary aim of the industry is considered to be its ability to raise the living standards of people. They also contribute to the economical condition of the nation. Thus, they play a vital role in increasing the GNP.

Industries provide goods and services, and the manufacture of these products occurs in the industries. Industries help in increasing productivity and reducing the cost of production.

They can be classified or segregated into a few major types, namely, primary, secondary, tertiary. These deal with different products and their concerning factories. Quaternary is also considered a type of industry.

Main Differences Between Factory and Industry

  1. A factory is called in reference to a site or a location where things are made with the help of machines. An industry is known as a collection of similar kinds of factories or manufacturers.
  2. All factories can be listed under industries. Industries, on the other hand, refers to a concept or a notion.
  3. Factories are considered to have a narrow scope. By comparison, industries possess a wider scope.
  4. Examples of factories include job shops, electronics, metal, chemicals, petroleum, etc. Primary, secondary, tertiary, and quaternary come under types of industries.
  5. Factories represent a physical or tangible location. Industries are abstract or intangible concepts.


Both the terms factory and industry are widely used in relation to the production, manufacture, and selling of goods and services. 

While a factory refers to a physical location or site where the manufacture of goods takes place with the help of machines and labor, the industry refers to a collection of businesses involved in the manufacture of similar products.

The items produced in a factory are sold within respective industries, and the resultant discharge helps in the growth of the nation and increases its GNP.

Factories are considered to fall under industries and are therefore are narrow and offer less scope. Industries are a wider concept and thus have an elevated level of scope.


  1. https://www.mdpi.com/904646
  2. https://ideas.repec.org/a/hur/ijarbs/v7y2017i7p52-60.html