Virtual Kollage: The factors that influence the localization of industries

Posted by / Wednesday, 4 January 2017 / No comments

The factors that influence the localization of industries















FACTORS THAT INFLUENCE THE LOCALIZATION OF INDUSTRIES
Definition of localization of industries
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.

INFLUENCING FACTORS
Climatic conditions
One of the factors that influence the location of industries is the climatic condition of the area. Certain crops or animals can only thrive under certain climatic conditions. For this reason, in setting up such particular industry, such peculiar climatic conditions are taken into consideration before the industry is sited.  

Availability of raw materials
Another factor that can influence the location of an industry is the availability of raw materials. Industries need raw materials to feed their factories and it must be easily available at all times. An entrepreneur would take such an important issue into consideration in the sting of his industry.

Source of power
One of the factors that must also be taken into consideration in the localization of industry is the source power or electricity. Every industry needs power to turn its machines for production to take place. No entrepreneur wants to install a plant and sit down idle because there is no electricity.

Nearness to markets
When goods are produced, they must be sold for profit. The availability of markets for the goods produced is an important factor in the localization of an industry. Once there is a market close by where the goods can be quickly sold it is a factor to determine the localization of industry.

Availability of labour
Labour is another factor that influences the location of industries. Labour is an essential component of production. Where labour is readily available and at a competitive price, industries would gravitate to that location. In other words, labour influences the localization of industries.

Government intervention
Another factor that influences the location of industry is government policy. A government can decide to create an enclave for the production of particular goods and therefore offer incentives to encourage people to locate in that area. The free zones concept is an example of localization of industry. The government can give tax exemption and facilitate concessionary loans to entrepreneurs to locate their industries in a particular locality.

SAMPLE QUESTIONS
1. Highlight six factors that influence the location of industries.

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