A capital-intensive business and a labour-intensive business differ mainly in how they use resources to produce goods or services. A capital-intensive business requires large investments in machinery, equipment, technology, and infrastructure. Examples include airlines, oil refineries, automobile manufacturers, and power plants. These businesses rely heavily on physical assets and usually face high fixed costs. Since they need significant capital to operate, financing through loans or investors is often essential. The workforce is important, but plays a smaller role compared to the machinery and systems driving production.

On the other hand, a labour-intensive business depends more on human effort than on expensive equipment. Industries like agriculture, hospitality, construction, and textiles rely on a large workforce to perform most of the tasks. Their costs are dominated by wages and benefits rather than capital investment. Labour-intensive businesses are usually more flexible in scaling up or down since adjusting the workforce is often easier than managing heavy fixed assets.

The risks also differ. Capital-intensive businesses face pressure from interest rates, depreciation, and maintenance costs, while labour-intensive firms are more affected by wage levels, labour laws, and employee turnover. Profit margins in capital-intensive industries often depend on achieving economies of scale, whereas labour-intensive companies focus more on workforce productivity.

In short, capital-intensive businesses prioritise assets and technology, while labour-intensive ones rely on human resources as their core strength.