Industrial Location

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Industrial Location

• Where do industries locate?
• Page 553 561 in Integrated

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Where do industries locate?
Before building a factory, any manufacturer
should consider the major elements involved in
the industrial location. A decision must be made
as to which site is likely to provide the best
location. This will be where the cost or raw
materials, energy, labour, land and transport is
lowest, and where there is a large market for the
product.
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Physical Factors

• Raw Materials
• Power energy
• Natural routes
• Site and land
• In the 19th Century it was physical factors such
  as the source of raw materials (eg iron ore) and
  sources of energy (eg coal) which determined
  industrial locations

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Human Economic Factors

• Labour
• Capital
• Markets
• Transport
• Economies of scale
• Government Policies
• Improved Technology
• Leisure facilities
• By the late 20th Century, the 3 main factors
  deciding industrial location were more likely to
  be nearness to a large market, the availability
  of skilled labour and government.

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Raw Materials
The bulkier and heavier these are to transport,
the nearer to the factory should be located to
the raw materials. This was even more important
in times when transport was less developed.
Footloose or Raw-Material orientated industries
We will come back to this soon!
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Power supplies energy
This is needed to work the machines in the
factory. Early industry needed to be sited near
to fast flowing rivers or coal reserves, but
today electricity can be transported long
distances. Electricity, as well as being clean,
can be transferred economically over long
distances either to the long-established areas
where activity is maintained by geographical
inertia or to new areas of growth. (In 1900
electricity could be transmitted economically
only 59km today the distance is over 1,500km).
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Transport

• Transport costs used to be the main consideration
  when locating an industry
• However, networks have now improved and costs
  are now only 2 of total expenditure
• Location can be important with access to good
  transport links (eg M4 corridor)

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Labour Supply

• How skilled does the labour force need to be?
• The less skill the less pay
• Labour is traditionally immobile is this still
  the case?
• The role of women and trade unions

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Markets

• Today, the pull of a large market is more
  important than the location of raw materials and
  power supplies
• Industries locate close to market if
• The product is bulky
• The product is perishable
• The market is large (conurbations)
• The market is wealthy
• Prestige is important (eg publishing)

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Capital

• Working capital (profits)
• Physical or fixed capital (buildings and
  equipment)
• Social capital

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Government Policies

• Reference to other Powerpoint Presentation called
  Linkages and Muliplier effect

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Land and Environment
Although early industry did not at first take up
much space, it did need flat land. As the size
of plant increased (eg steelworks), more land was
needed. Ideally such sites should be on low
quality farmland where the cost of purchase is
lower. Last century many sites were in todays
inner city areas whereas now they tend to be on
edge-of-city greenfield locations.
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Webers Theory of Industrial Location

• Alfred Weber was a German spatial economist who
  in 1909 devised a model to try to explain and
  predict the location of industry
• He tried to find order in chaos and made
  assumptions to simplify the real world in order
  to produce his model.
• It generally looks at Cost factors

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Possible Least Cost Locations
Market
A
B
A
C
RM1
RM2
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Possible Least Cost Locations
The triangle shows the location of the only 2 raw
materials used to manufacture a product and the
single market in which the product is sold. The
road netwrok and the distance in km between the
road junctions can also be shown. There are 3
possible locations for the factory A, B or C Two
tonnes of raw material 1 and one tonne of raw
material 2 are required to manufacture one tonne
of the finished product Trabsport costs are 1
per tonne km
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Possible Least Cost Locations
Market
A
25
B
40
40
10
10
10
A
C
20
25
40
RM1
RM2
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A small number of industries including soft
drinks and brewing are weight gaining and are
thus market orientated in terms of location. The
heavy weight gain for both of these
industriescomes from the adding of water. The
baking industry is also citied frequently as an
example of weight gain but here it is largely an
increase in volume rather than weight, although
the impact on transport costs is similar.
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Material Index

• The MI shows the relationship between the
  relative weights involved in transportation
• MI Weight of Raw Materials
• Weight of Finished Product

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Building on the concept of the locational
triangle, the variation of transport costs in a
region can be more clearly illustrated by the use
of isotime and isodapanes. Isotims are lines of
equal cost, showing the increasing cost with
distance relating to one factor such as the
movement of one raw material to the factory.
Isodapanes show variations in total costs and are
thus the product of isotims.
You should take note of the criticism of Weber's
model - Page 561