What factors influence the location of industry?

During the last century in the UK, traditional heavy industries, such as iron and steel, were located next to coalfields (for power supply), raw materials and railways. But industries in the UK today are generally high-tech and tend to be far less tied with regard to their location. However, company owners still try to find the best location and need to consider a number of key factors when deciding where to locate a factory:

Site - the land on which a factory is built will vary in size, depending on what it makes.
- Is there enough space?
- Relief - is the land suitable to build on?
Raw materials - the natural resources used to manufacture goods. Factories need to be close to raw materials if these are heavy or perishable.
Power supply - the energy source for the factory. Factories that use more energy, e.g. coal, prefer to locate closer to the power supply.
Labour - the workers employed in a factory. As technology improves, fewer people are employed. Most factories employ local people.
Market - consumers who buy the goods produced by the factory. The main markets for manufactured goods are urban areas where most people live.
Transport - improved transport links allow factories to locate further from their raw materials, labour or market. Does it need close proximity to motorways, ports, railways or airports?
Communications - access to good broadband speeds, and a reliable mobile phone signal, are crucial for business.
Government grants - is the government offering money or tax breaks to locate in a certain area?

Why is globalisation important?

Some large countries now operate in different locations in more than one country. They are called transnational corporations (TNCs) or multi-national companies (MNCs). They may be involved in a range of activities, from research and production to marketing and retailing, in different parts of the world (map C). This is part of the process of globalisation, where jobs, people and ideas move around the world. Globalisation affects what we:

Eat - for example, we eat Indian and Mexican food in the UK.
Wear - for example, people all around the world wear Nike trainers.
Watch on TV - for example, in the UK we watch shows made in the USA, such as Friends.
Cultural identity - people in different countries eat and wear the same, thus reducing cultural identity.

A good example of a global industry is clothing. Manufacturing clothes employs a lot of people, so labour is the key factor in choosing a factory location. These days, most of our clothes are made in countries in Asia, such as Bangladesh where labour is cheap (photo D). It means the clothes we buy are cheaper too.

Globalisation has been aided by improvements in transport, communication and technology, which have meant that proximity of raw materials, energy supply and market are no longer as important for the location of a business. Goods can now be transported easily, energy supplies are available all over the world and markets have become global. Low labour costs have therefore become the most important factor affecting the location of a manufacturing company.

What are the positive and negative effects of globalisation?

Positive Effects:

A reduction is trade taxes means that companies in developing countries find it easier to trade their products with other developing countries and more recently with developed countries.
Huge improvements in transport and demand for global holiday destinations from people in developed countries means that many developing countries are now generating a high income form tourism. For example, many Asian and African countries such as Thailand and Egypt generate money from tourists through a tourist tax paid to the government which then invests the money in developing facilities such as schools, roads and hospitals.
Many TNCs that decide to locate their factories in developing countries provide jobs for local people who may otherwise be unemployed.
When TNCs come into a country, they provide jobs which, together with goods being shipped out of the country (exports), should increase the country's wealth.
Workers gain skills, practical and managerial, that they may not have had the opportunity to gain.
Workers and their children may benefit from healthcare and/or education schemes provided by the ZNCs.
TNCs can often supply a greater range of cheaper products to their markets while maintaining and growing their profits.

Negative Effects:

Governments in developing countries have often encouraged the growth of industry without considering the environmental effect. China, for example, contains 16 out of the 20 most polluted cities in the world.
Some TNCs have located their factories in developing countries in order to exploit the low wages in these countries and thereby increase their profits. Often factory workers are paid below the average wage of workers in developed countries and forced to work very long hours in poor conditions where they may not have access to drinking water. In some factories child labour is used, even when it is illegal.
The rapid increase in TNCs locating their factories in developing countries means that many developing countries are becoming dependent on these companies for jobs. many local people, who may have previously worked for local companies or as farmers, take jobs with TNCs.
As manufacturing jobs move to developing countries, manufacturing industries close down in developed countries and employees suffer job losses.

Google Sites

Report abuse