Industry Location Factors 2

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Industry Location Factors 2

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Transport is an important factor as raw materials have to be assembled and finished products have to be sent to consuming centres. Nodal points, which are easily accessible, are preferred for locating industry. Moscow and Chicago are such nodal centres where industries are concentrated because of easy accessibility by road, rail and waterways. Waterways provide cheap transport of bulky commodities, such as coal, iron ore, timber, food grains and machinery. Hence large industrial centres are located on rivers, which are used for navigation. Industrial centres are located on the Rhine River in Europe, St. Lawrence in North America, Yangtse and the Ganga in Asia. Ports have the advantage of cheap transport by sea and this enables import of raw materials and export of finished products. Some of the largest industrial centres of the world such as New York, London, Tokyo, Shanghai and Calcutta are major ports.

Oil refineries are located along the coast because of the facility to import crude oil. In modern times, transport has becomes rapid and more efficient and widespread so that it is no longer a deciding factor for industrial location. In undeveloped areas such as Siberia or Canada construction of railway lines has encouraged development of resources and industrialization.

Capital: Capital is needed for establishing an industry and for day-to-day management. Some countries have large capital resources for starting new industries. Other countries depend on foreign aid or loan investment from developed countries and from international financial institutions like the World Bank. The American oil companies developed the oil fields in Middle East countries. Capital is not an important factor of location as it is the most mobile of all industrial resources.

Besides local or foreign capital, the country must have financial institutions like Banks, Insurance and other financial firms for channeling capital to industry. Investment of foreign capital is hindered by political instability or threat of nationalization of industries. Capital is not a constraint for starting small-scale industry or cottage industry.

Markets: Markets for industrial products such as cars depend not on the number of people in a country but their purchasing power. Some industries like those producing machinery, electrical appliances, electronic goods have worldwide markets. Market is an important factor for industrial location for perishable goods manufacturing like bakeries and dairies. Manufacture of fragile products like glassware, bottled drinks, and bulky commodities like brick making, manufacture of cheap furniture are market oriented. Industries, which produce articles catering to the local needs of the people such as tailor, made clothing, jewellery, shoes and packaging industries are close to their markets. Industries, which manufacture automobile components, are located near the automobile plants, which use them. Thus market is an important factors of location for certain types of industries.

Other factors: Availability of sites, level ground with scope for expansion, especially on the periphery of an urban centre is an advantage. Climate is an important factor though heating and air conditioning is now possible. Extremes of climate like Alaska, deserts in Arabia, forests in Zaire basin make such areas unfavorable. Water supply is an important factor for iron and steel, paper, chemicals and synthetic fibre industries.

Government policies, taxes and duties levied, subsidies and concessions granted influence the location of industries. Dispersal of industries may be encouraged for strategic reasons. Concessions may be given for starting new industries in backward areas. Import may be banned to encourage local industries so as to attain self-sufficiency. Exports may be encouraged to earn foreign exchange. In many countries industries are regulated by planning authorities, which fix targets and priorities. Thus the location of an industry cannot be explained as the result of a particular factor as a number of factors are involved.

Next: World Industry Locations

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