Posted by / 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.

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.

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.

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?

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