Location and localization of industry

Distinguish between location and localization of industry

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Location of an industry is the setting of economies of scale in pre-decided geographical areas where the producers receive several advantages that include reduced cost of production, cheap labour and an area where they expect the demand to be of the highest accord. There are several factors due to which the industries choose a particular place for establishing their industries. They are:

  • Availability of raw materials and land
  • Market demand for the product they want to produce
  • The current condition of transport networks
  • Availability of funds to finance the setup
  • Climatic conditions
  • Banking facilities and insurance coverage

Localization of industry refers to the concentration of industry in one particular area. Firms that produce similar industries can benefit from production from one single area. There are several advantages that the firms receive due to localization.

  • Drastic increase in the employment opportunities for that particular area.
  • Once a big industry decided to focus on a particular area, it also paves the way for better infrastructure in the form of better roads, railways lines, schools etc.
  • It also leads to urbanization with more and more financial facilities available
  • Better standards of living

It also comes with some disadvantages

  • When one or more firm have decided to concentrate on a particular area for production, it also leads to increased pollution levels creating health hazards for the society.
  • It also creates massive regional imbalance as some regions become more developed than the others despite being in the same state.
  • Cost of living tends to go up
  • Traffic congestions increases in such places

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