World Geography 3200/02
Factors That Influence the Location
of an Industry,
Site and situation
The location of an industry is influenced by two general sets of
conditions.
1. Site Factors
2. Situation factors
Site Factors
Site: The position of a structure or object in physical, local terms.
Site factors: physical cost factors associated with locating an industry in an area
Factors that influence the selection of the physical placing of industry include
1. Nearness to resource: Industry using heavy materials should be placed near
the resource to cut down on the cost of shipping.
2. Land: Industry looks for inexpensive land. Land needs to be flat, well drained,
and dense enough to support heavy structures.
3. Energy: Industry is best placed near sources of energy that are economical, and
reliable. Not as important today due to ability to transport energy over
long distances
Situation factors
Situation: The position of a phenomena (town, industry, building) in
relation to other phenomena
Situation Factors: the location of a place relative to its surroundings and
other places.
Factors included in an area's situation include the accessibility of the
location, the extent of a place's connections with another, and how
close an area may be to raw materials if they are not located specifically
on the site.
Compare the terms resource-oriented industry
and market-oriented industry.
Resource-Oriented Industry:
A manufacturing industry that tends to locate near the source of its raw material.
In these industries the ratio of the weight of raw materials used in the manufacture
of the product to the weight of the finished product tends to be high.
Example: cost of shipping bulk logs is greater than the cost of shipping finished paper.
Thus pulp and paper mills are set up near the resource. This makes the pulp and paper
industry a resource oriented industry
Resource-oriented and market-oriented industries
Market Oriented Industry:
An industry that tends to locate close to its market. Industries locate near the
market if the cost of transport of the finished goods to the customer is a major
part of the selling price. One example is the brewing industry where large, bulky
quantities of water are used to make the finished product.
Example: The cost of shipping finished pop drinks is higher than the cost of shipping the
ingredients and adding them to water. Thus the production of pop drinks is done near the
consumer.
Weight-gain / Weight-loss production and the
location of an industry.
If a product changes in weight during the production this will have an influence
on where the industry will be located
The impact on location comes from the cost of shipping and its relation to
weight of the product. i.e if something is heavier it costs more to ship.
Industry is located where shipping costs will be the smallest
Weight gain production: products that gain weight during production.
Examples: Pop, Paint.
Weight gain production is done near the market
Weight loss production: Products lose weight or bulk in the production process
Examples: Pulp and paper, ore smelting.
Weight loss production is done near the resource
The Agglomerating Tendency.
Agglomerating tendency: A pattern of economic activity in which industries
concentrate in the same location. It may also apply to concentrations of
particular commercial shops and services
Ex. Car factory & tire factory. How does each benefit by being
located close to each other?
1. Market / Supply is close by.
2. Transportation costs are reduced.
3. Costs of services like waste disposal and security can be
shared
Labour Force Characteristics that make it
attractive to industry.
Labor force characteristics that attract business:
1.Wages expected: lower wages in some developing countries like
Mexico, and the Philippines attract manufacturers
2. Training: highly skilled labourers can attract businesses that
require welders, mechanics, carpenters etc.
3. Benefits (EI, Pensions etc); lower costs of employment
insurance, pensions , etc. can attract business just as easily as low
wages.
4. Availability; a high unemployment rate might attract business,
especially if large numbers of workers are required.
Government subsidies and their influence
on the location of a given industry.
Transportation subsidies affect the location of industry
Subsidies allow businesses to locate farther from the resource.
Subsidies allow governments to encourage industry
in rural areas.
Examples:
•ice breakers in Botwood;
•roads in Labrador;
•cost of coastal transportation in Labrador;
•cost of crossing the Gulf of St. Lawrence
Tax breaks affect the location of Industry.
Provinces like Newfoundland have attempted to attract business by offering
tax breaks. The company obtains a financial break while the province gets the
advantage of putting people to work.
Patterns in the distribution of highly
industrialized areas on earth
The highly industrialized areas on the earth's surface are concentrated in 4
definite regions:
North America, Western Europe, Japan, and Australia