This refers to industries that are connected because they depend on each other to obtain or to sell raw materials.
If the final product or finished products of one industry is used in another industry as its raw material then a forward linkage occurs. For example, sugar produced from a sugar factory is used by a bakery to make pastries. Sugar is therefore the end product of one industry and used as raw material in another. Other examples include agriculture and canning, lumber and construction and cattle farming and meat processing.
A backward linkage occurs when the demands of an industry leads to the establishment of other industries to produce for the needs of this industry. For example, the establishment of several multinational fast food restaurants in the Caribbean has led to new businesses being established to supply these restaurants with raw materials (vegetables, ground provisions, meats and paper based products).