‭ actors Affecting the Location of Industry:‬

F
‭1. Production Methods and Location Decisions:‬
‭●‬ ‭Type of Production: The choice of production method influences the location. For instance, job production on‬
‭a small scale may prioritize proximity to components, while flow production on a large scale may consider the‬
‭location of component suppliers due to transportation costs.‬
‭●‬ ‭Transportation Method: The adoption of Just-In-Time (JIT) systems can impact the importance of the‬
‭proximity of component suppliers.‬
‭2. Market:‬
‭●‬ ‭Historical Importance: Locating a factory near the market was historically crucial for products that gained‬
‭weight during production, making transportation costlier. For example, a drinks manufacturer might consider‬
‭the weight of filled bottles.‬
‭●‬ ‭Modern Considerations: Improved transport links have reduced the importance of proximity to markets.‬
‭However, for perishable goods, such as milk or baked goods, proximity to retail outlets may still be relevant.‬
‭3. Raw Materials/Components:‬
‭●‬ ‭Transportation Costs: The weight or cost of transporting raw materials may influence location decisions.‬
‭Processing raw materials near the source, especially if waste is generated, can be more cost-effective than‬
‭long-distance transportation.‬
‭●‬ ‭Processing Time: For products requiring quick processing while fresh, proximity to raw material sources‬
‭remains important.‬
‭4. External Economies of Scale:‬
‭●‬ ‭Component Suppliers: Locating near suppliers of various components can be advantageous, especially in‬
‭industries like car manufacturing where multiple components are used.‬
‭●‬ ‭Support Businesses: Proximity to businesses providing support services, such as equipment installation and‬
‭maintenance, can be beneficial. Educational institutions in the area may contribute to research collaboration.‬
‭5. Availability of Labor:‬
‭●‬ ‭Skill Requirements: The type of labor needed influences location decisions. Skilled labor may lead to location‬
‭in areas with a high concentration of relevant skills, while areas with high unemployment may be preferred‬
‭for a large number of unskilled workers.‬
‭●‬ ‭Wage Rates: Variances in wage rates can influence location decisions, with businesses often preferring‬
‭areas with lower wage rates.‬
‭6. External Economies of Scale:‬
‭●‬ ‭Support Services: Proximity to businesses providing support services, such as equipment installation and‬
‭maintenance, can be advantageous. Educational institutions, like universities, with research departments‬
‭may foster collaboration and innovation.‬
‭7. Availability of Labor:‬
‭●‬ ‭Skill Levels: The type of labor required influences location decisions. Areas with a concentration of skilled‬
‭workers may be preferred for industries needing specific expertise.‬
‭●‬ ‭Unemployment Rates: For industries requiring a large number of unskilled workers, areas with high‬
‭unemployment rates might be more suitable. Wage rates may also play a role in the decision-making‬
‭process.‬
‭Government Influence:‬
‭●‬ ‭Positive Incentives: Governments often use state-funded grants to encourage businesses to relocate to‬
‭specific areas. This is particularly common in regions with high unemployment, where financial incentives‬
‭can attract businesses.‬
‭●‬ ‭Regulations and Restrictions: Conversely, government influence may include regulations or restrictions that‬
‭could impact business operations. For instance, a government might prohibit a business from setting up if it‬
‭produces harmful waste that poses environmental risks.‬
‭Transport and Communications:‬
‭●‬ ‭Proximity to Transport Systems: Accessibility to road, rail, waterways, ports, and airports is crucial for‬
‭businesses. For export-oriented businesses, proximity to ports is particularly important. Convenient‬
‭transportation reduces delivery time and costs.‬
‭Power and Water Supply:‬
 ‭●‬ ‭Reliability of Power and Water: While electricity is widely available, certain industries may require a reliable‬
‭ ower supply without regular interruptions. Adequate water supply is essential, especially for processes like‬
p
‭cooling in power stations.‬
‭Climate:‬
‭●‬ ‭Occasional Importance: Climate may not affect most manufacturing businesses, but in some cases, it can be‬
‭crucial. For example, Silicon Valley benefits from a dry climate, aiding the production of silicon chips.‬
‭Factors Affecting the Location of a Service Sector Business:‬
‭​‬ ‭Customers:‬
‭●‬ ‭Proximity to Customers: Essential for services requiring direct contact, such as plumbers, electricians,‬
‭hairdressers, beauticians, caterers, restaurants, cafes, gardeners, builders, and post offices.‬
‭●‬ ‭Quick Response Time: Businesses needing swift responses must be located nearby for effective‬
‭customer service.‬
‭​‬ ‭Personal Preference of Owners:‬
‭●‬ ‭Location Near Residence: Business owners often prefer locations near their homes, influencing‬
‭service center location decisions.‬
‭​‬ ‭Technology:‬
‭●‬ ‭Remote Service Capability: Advancements in technology enable some services (e.g., website‬
‭designers) to operate remotely, reducing the need to be near customers.‬
‭​‬ ‭Availability of Labor:‬
‭●‬ ‭Skilled Labor Location: Service businesses requiring specific skills may need to locate near areas‬
‭with a concentration of such skills.‬
‭●‬ ‭Large Employee Base: Businesses needing a large workforce may choose locations near large towns‬
‭or cities.‬
‭​‬ ‭Climate:‬
‭●‬ ‭Tourism-Linked Services: Businesses linked to tourism, like hotels, may choose locations based on‬
‭climate and proximity to attractions.‬
‭​‬ ‭Near to Other Businesses:‬
‭●‬ ‭Support for Large Businesses: Services supporting large companies may need to be nearby for quick‬
‭response, e.g., equipment repair services.‬
‭●‬ ‭Convenience for Customers: Services like banks traditionally prefer locations near busy areas, but‬
‭internet and mobile banking have reduced this importance.‬
‭​‬ ‭Rent/Taxes:‬
‭●‬ ‭Cost Considerations: Services not requiring a central location (e.g., doctors, dentists, lawyers) might‬
‭opt for outskirts to benefit from lower rents and taxes.‬
‭Factors Affecting the Location of a Retailing Business:‬
‭​‬ ‭Shoppers:‬
‭●‬ ‭Area Attractiveness: Retailers seek popular areas attracting the target customer demographic.‬
‭●‬ ‭Income Levels: Location may be influenced by the income levels of the area's population.‬
‭​‬ ‭Nearby Shops:‬
‭●‬ ‭Proximity to Regularly Visited Shops: Locating near popular businesses can increase foot traffic and‬
‭sales.‬
‭●‬ ‭Competition: Presence of competitors can be a positive or negative factor, depending on the type of‬
‭retail business.‬
‭​‬ ‭Customer Parking:‬
‭●‬ ‭Convenient Parking: Easy access to parking encourages shoppers to visit, potentially increasing‬
‭sales.‬
‭​‬ ‭Availability of Suitable Vacant Premises:‬
‭●‬ ‭Shop/Premises Availability: If suitable premises are not available, the business may need to‬
‭reconsider the desired location.‬
‭​‬ ‭Rent/Taxes:‬
‭●‬ ‭Central Location Costs: More central locations often come with higher rents and taxes.‬
‭●‬ ‭Popularity Impact: Popular areas may have higher demand, affecting rental costs.‬
 ‭​‬ ‭Access for Delivery Vehicles:‬
‭●‬ ‭Delivery Accessibility: Consideration of ease of access for delivery vehicles to premises.‬
‭​‬ ‭Security:‬
‭●‬ ‭Crime Rates: High crime rates may deter businesses, while patrolled areas may be preferred despite‬
‭higher costs.‬
‭​‬ ‭Legislation:‬
‭●‬ ‭Legal Restrictions: Laws in some countries may restrict trading or marketing in specific areas.‬
‭Factors Influencing Business Location Decisions:‬
‭1. New Markets Overseas:‬
‭●‬ ‭Increased Sales: Steady growth in overseas sales may prompt a business to relocate nearer to these‬
‭markets for cost-effectiveness.‬
‭●‬ ‭Service Sector Consideration: For service sector businesses, proximity to customers is crucial.‬
‭2. Cheaper or New Sources of Materials:‬
‭●‬ ‭Raw Material Availability: Businesses may relocate to countries where raw materials are more easily‬
‭obtained or processed.‬
‭●‬ ‭Cost Efficiency: Utilizing raw materials at their source might be more cost-effective than transporting them.‬
‭3. Difficulties with the Labor Force and Wage Costs:‬
‭●‬ ‭Rising Wage Costs: Escalating wage costs may lead labor-intensive businesses to relocate to countries with‬
‭lower wages.‬
‭●‬ ‭Skilled Labor Availability: Businesses may move to areas with the required skilled labor, e.g., IT skills in India.‬
‭4. Rents/Taxes Considerations:‬
‭●‬ ‭Increasing Costs: If costs like rent or taxes rise, businesses might consider relocating to countries where‬
‭these costs are lower.‬
‭5. Availability of Government Grants and Incentives:‬
‭●‬ ‭Encouragement for Foreign Businesses: Governments may offer grants, lower taxes, or incentives to attract‬
‭foreign businesses, boosting investment and job opportunities.‬
‭6. Trade and Tariff Barriers:‬
‭●‬ ‭Avoiding Trade Barriers: Businesses may locate in a country to bypass trade barriers like tariffs or quotas‬
‭and avoid restrictions.‬
‭Role of Legal Controls on Location Decisions:‬
‭1. Encouraging Development in Areas of High Unemployment:‬
‭●‬ ‭Development Areas: Governments may use legal controls to encourage businesses to set up in areas with‬
‭high unemployment, providing financial grants or subsidies to stimulate job creation.‬
‭2. Discouraging Location in Overcrowded or Environmentally Sensitive Areas:‬
‭●‬ ‭Planning Regulations: Legal restrictions, such as planning regulations, can prevent businesses from‬
‭establishing in residential or environmentally significant areas.‬
‭●‬ ‭Preserving Natural Beauty: Governments aim to protect areas noted for natural beauty by restricting‬
‭non-farming businesses.‬
‭Government Measures to Influence Location:‬
‭1. Planning Regulations:‬
‭●‬ ‭Restricting Business Activities: Governments use planning regulations to legally restrict certain business‬
‭activities in specific areas.‬
‭●‬ ‭Refusing Planning Permission: Businesses may be denied permission to build in certain areas, particularly in‬
‭residential or ecologically important zones.‬
‭2. Government Grants or Subsidies:‬
‭●‬ ‭Financial Assistance: Governments offer grants or subsidies to businesses to encourage them to locate in‬
‭undeveloped or high-unemployment areas.‬
‭●‬ ‭Non-Repayable Grants: Businesses may receive non-repayable financial grants or subsidies, such as‬
‭low-rental factories.‬