1. Locational Factors for Industries

2. Factors affecting industrial location

3. Locational Factors Physical Factors Land Raw materials Power / Energy
Human Factors:
Labour
Transport
Market
Technology
Capital
Behavioural factors
Government Policy
Agglomeration

4. Land Land: Heavy industries: A large area of cheap low flat land.
Location
Size
Landform
Cost
Heavy industries: A large area of cheap low flat land.
Light industries: Small apartments are also OK.

5. Raw Materials Raw materials Present everywhere Localized
Water, Air, Soil……
Localized
Iron ore, coal, gold, tin, ……

6. Raw Materials Characteristics of Raw Materials
Weight loss or Weight gain
Degree of perishability
Value per unit of weight
Availability of substitute materials
Number of materials involved in production
Source of supply
Raw materials oriented / Market oriented

7. Raw Materials Decreasing importance of raw materials
Improvement in Transport
Improvement in industrial techniques
Others:
New raw materials / Substitution
Recycling

8. Power / Energy Type of Power Electricity Water  H.E.P. Fossil fuel
Coal
Oil
Natural Gases
Nuclear
Electricity
Aluminum Smelting as a Power Oriented Industry

9. Labour Cost of Labour – Wage Level Skills of Labour Labour Mobility
Highly skilled, Semi-skilled, Unskilled
Labour Mobility
Highly skilled (highly mobile)
Semi-skilled (fairly mobile)
Unskilled (least mobile

10. Transport Import raw materials Export finished products
Transport cost was the critical factor affecting industrial location in the past

11. Transport Mode Long distance Short distance Speed Goods Type Water
Cheapest
Highest
Slow
Bulky, low value,
non-perishability
Rail
Cheap
High
Fast
Bulky
Road
Fair
Door to door, light
Air
------
Fastest
High value, fragile
Perishability

12. Market Markets are where the finished products will finally go.
Markets attract many industries to locate
Good infrastructure
Transportation, Electricity supply, water supply, drainage system, communication…….
Large population size
Large labour force
Skilled labour
Obtain advanced technology
Industrial agglomeration

13. Market Some industries are more likely to be located near markets
Perishable products: eg. Bread, cakes….
Fragile products: eg. Bottled drinks, porcelain…..
Bulky and low value products: eg. Brick-making…..
Labour intensive industries: eg. Toy-making, electrical goods….
Keep close contact with consumers: eg. Jewellery, printing…
Involve large quanities of raw materials: eg. Electric Appliance..
Specialized products:
eg. Automobile parts manufacturers located near auto making centre

14. Technology Technology is very important. It is a localized factor
It changes the production process completely
It is a localized factor
Ways to obtain technology
From advanced countries (developed world)
Universities
Research Centre

15. Technology It costs much capital for research
Technology-intensive industry = Capital-intensive industry

16. footloose industry
Footloose industries are not tied to a particular location. They include high-tech industries and are located near motorway junctions or on the edges of towns and cities in business parks. The products are often electronics and computer components.
 Diamonds and computer chips are some examples of footloose industries.

17. Factors that effect the high –technology industries
High-technology industry involves a highly-skilled workforce and its products require a high proportion of research and development.
High-technology industry is relatively footloose since access to raw materials is not very important. The ‘raw materials’ that are required are usually lightweight electronic components.

18. High-technology industries employ few people
High-technology industries employ few people.(highly skilled, inventive)
Need to be attractive to researchers and operators e.g.. Climate, health, social point of view.
Need to be close to other high-technology firms as they are able to exchange ideas and information
Large areas of low-cost greenfield sites

19. Government Policy Rationale of government intervention
Strategic reasons: eg. China, USA
Economic reasons
Promote overall economic growth
Promote the growth of a particular industry
Diversify the economy
Ensure regional economic balance
Ensure efficient ultilization of resources

20. Agglomeration Industrial Linkages Locational choice
Continuing operation of firms at given location
Constraint on movement

21. Agglomeration Types of Linkage Material Linkages (Tangible)
Process Links
Sub-contract Links
Service Links
Marketing Links
Information Linkages (Non-tangible)
Banks, stock-brokers, telephone and face to face contact between firms

22. Agglomeration Reasons for agglomeration (External Economies of Scale)
Transport savings
Access to skilled labour
Presence of ancillary services.
Possibility of internal economies
Infrastructure savings
Attract investment
Research and development

23. Agglomeration
Decentralization (Suburbanization of industries)

24. Agglomeration Factors affecting decentralization Expansion of firm
Redevelopment of inner cities
Inner city problems which hinder firms development
Demand for office space in the central city
Suburbanization (population & market)
Nature of industry
Government Encouragement

25. Location of iron and steel industries
Raw materials
The location of iron and steel industry is controlled by the availability of raw materials because iron and steel industry uses large quantity of heavy and weight losing raw materials. •Nearness to market
Iron and steel industry products are quite heavy and bulky and transportation cost is very high. Therefore nearness to market is one of the major factor which influence the localization of iron and steel industry.