Posted by Chester Morton / Tuesday 3 January 2017 / No comments
The factors that determine the location of industries
For an entrepreneur to decide on where to locate his
industry, he or she takes several factors into consideration. The concept of
deciding where to site an industry or a factory is what is referred to as the
location of industries.
FACTORS
Nearness to raw material
One of the factors that are taken into consideration in the
location of an industry is how close the raw materials needed to feed the
factory are. One of the reasons for considering this factor is to reduce the
cost of transporting the raw material to the factory so as to maximize profits.
Labour
Another factor to consider in locating an industry is the source
of labour. Locating the industry where labour can be easily and quickly sources
is a factor for consideration. Some industries have even moved a whole industry
from their home country to another country because labour in the mother country
has become too expensive.
Supply of electricity
Industries depend on electricity to power their machines. In
the absence of electricity, it would be difficult to operate an industry. Talking
about electricity also includes the cost of it. It must not only be readily
available, it must be cheap so that the cost of it alone would not drive the
industry aground.
Climatic conditions
Another factor for consideration in the location of
industries is the climatic condition of the area. Normally, an entrepreneur would
decide to locate an agricultural industry in an area that is noted for its good
soil as constant supply of water.
Market for the goods produced
After goods are produced, they must be sold. Another factor
for consideration in locating industries is to ensure the availability of
market for the products. Where there are not markets for the goods, then the
venture is a non starter. The markets must be close so that the industry does
not incur cost in transporting the goods to the markets. If the goods have to
be transported, then the transportation system must so efficient as the lower
the cost to some extent.
SAMPLE QUESTIONS
1. Discuss six factors that must be taken into consideration
in the location of an industry?
2. Assuming you are an entrepreneur, what factors would you
take into consideration if you want to locate an industry?
