Factors of Industrial Location
In order that the industries operate at maximum profit and optimal production, their locations can be important. The following are the basic factors of industrial location. Of these, either all of them or a combination of a few are important in locating the industries.
Raw Materials. Natural resources are generally raw materials. They are obtained through primary industries. Iron ore, timber, chemicals and skins, for example, are raw materials for some specific industries. Industrial productions depends upon the supply of raw materials. Industries depend on heavy raw materials or on bulk of the raw materials for production are located in the places of raw materials. Steel industries are found where iron ores are mined. Likewise, they are also located nearer ports to facilitate import of raw materials from elsewhere. Also industries such as those producing perishable items, food processing, forest products and mineral industries and also secondary industries are all located in the places of raw materials. These could be mineral resources, agricultural products, forest resources, animal or sea products.
Market. Market is where demand and supply meet. Manufactured products are sold in the markets for meeting the consumer needs. Purchasing capacity, people's demand and the ability to earn determine market development. Industries located nearer to markets are those which process fruits, flowers, fish and such other perishable products, glass industry, cheap but bulk products, bricks, tiles and packaging industries. Even weaving industry is located nearer to markets. Those industries which are in need to be in contact with people are also located nearer to the markets.
Location. Industrial location is determined by the climate and topography as well. Flat and areas rich in water resources are also favourable areas for industrial location.
Capital. No industry could function without capital. To buy the land where industry is to be set up, raw materials, office equipment and to pay wages, we need the capital.
Transport. To transport raw materials to the industrial site and the finished products to the market, we need transport.
Fuel. For every industry, fuel is the most important need. Industries are dependent on the location of coal, petroleum, hydroelectricity and atomic power. There is however no need for the industries to locate themselves nearer to sources of fuels other than coal, as they are easily transported or transferred.
Labour. The size of an industry is determined by the number of labour employed by it. Availability of labour and their skill determine the productivity of an industry. Even while introducing new technology, it is difficult to retrench employees. Hence, labour intensive industries are located nearer to their places of residence.
Government. Economic and political factors affect industrial production. Industrial policy of the government has the industrial production.
Historical background and technological development are also influential in the location of industries. Relocation of an industry is almost impossible proposition. If it happens, then it is because of inefficient labour, lack of transport facilities and high rent; it is even possible for the industry to be closed due to these factors.
The factors above impact upon the industrial location in different ways. All locations are determined by the operation of some of these factors. Those that are not available become more significant.