Posted by / Wednesday 4 January 2017 / No comments

The disadvantages of localization of industries

Localization of industries explained

Localization of industries refers to the situation where a particular type of industry of group of industries are located in a particular area in order to take advantage of some peculiar facilities that are available in that locality.

Decreases the mobility of labour
One of the disadvantages of the localization of industry is that it decreases the mobility of labour which is a reference to how workers move from one region or geographical location. Since the industry is located in that particular region or area, the labour is concentrated there and the workers no longer wish to relocate.

Uneven development
Another disadvantage of the localization of industry is that it may lead to the uneven development of the country. This is because the development of infrastructure is directed toward the enclave where the industries are located to the disadvantage of other parts of the country. Also the particular industry becomes more developed to the detriment of the other sectors of the economy.

Manpower development is one-sided
Another disadvantage of the localization of industries is that it leads to the development of only some set of skills. That is, skills related to the particular industry. For example, if the industry is mainly in software, the development of manpower would be concentrated in the area of software.

Following from the previous point, where only some aspect of manpower is developed, those who do not have the skill sets related to the industry that is prevalent in the area cannot acquire jobs. Therefore the localization of industries can lead to unemployment and job losses. This can also lead to dire economic consequences for the people in the locality.

Could be a target during wars
One critical disadvantage of the localization of industry is that the area could become a target for enemy soldiers in times of war. The enemy might attack the enclave to dislocate any advantage it thinks the located industry might be giving to the country. It might also be a target for terrorists who might want to get at the country.

It might attract criminal elements
Where there is wealth, criminal elements are attracted to that area. The localization of industry with its attendant creation of wealth attracts gangs, prostitutes, pimps and all kinds of people. In the end, what is to be a blessing becomes a burden to some people.

1. What are the disadvantages of the localization of industries?

2. Highlight six ways in which the localization of industries can affect a country. 

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