Factors Responsible for the Location of Primary, Secondary and Tertiary Sector Industries

Factors that influence the placement of industries

Industrial sites are inherently complicated. The availability of a variety of factors has an impact on these. Raw materials, land, water, labour, capital, electricity, transportation, and market are only a few of them.

Factors Affecting the Location of Businesses

We can divide location factors into two categories for simplicity of use: geographical variables and non-geographical ones.

Geographical Constraints

1. Raw material: A natural resource that can be used as a raw material is available.
2. Technology: To transform the resource into a valuable asset.
3. Power: The ability to make use of technology.
4. Human resources in the area who can work as labour to keep the operations running.
5. Connectivity between roads and trains.
6. Storage and warehousing are two terms that are used interchangeably.
7. Possibility of marketing
8. Land and soil characteristics.
9. Climate.
10. Water resources and precipitation
11. Natural resource vulnerability.

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Explanation:

• One of the most significant variables in an industrial setting is raw materials. The availability or location of raw materials may dictate the location of industries in and of themselves.
• Any industrial organisation requires power, whether it is conventional (coal, mineral oil, or hydroelectricity) or non-conventional in origin.
• The success mantra for the expansion of all sectors is the availability of manpower or skilled personnel.
• The location of an industry is always influenced by the availability of easy transportation. As a result, the intersections of canals, highways, and trains create bustling hubs of economic activity.
• At the end of the production process, the final goods should reach the market. As a result, proximity to the market is an additional feature to consider while choosing a place for industry.
• Another aspect that determines the industrial location is the availability of water. Because of this, many industries are built near rivers, canals, and lakes. The iron and steel industry, as well as the textile and chemical industries, all require huge amounts of water to work properly.
• The location chosen for the creation of an industry must be level and well-served by suitable transportation infrastructure.
• The climate of the industry’s chosen location is critical; severe climates are not conducive to effective industrial development.

Factors that are not geographical

1. Investment in capital.
2. Loans are available.
3. The investment climate is favourable.
4. Policies and regulations enacted by the government.
5. Pressure groups have an impact.

Explanation:

• The formation of industries necessitates a large amount of capital or investment.
• Another aspect that determines industrial location is government policies. To decrease regional inequities, manage excessive pollution, and avoid excessive clustering of enterprises in big cities, the government imposes some restrictions on the allotment of land for industries.
• Industrial inertia refers to a company’s or industry’s tendency to delay transferring facilities despite changing economic circumstances that might otherwise force them to do so. The costs of shifting permanent capital assets and manpower frequently surpass the costs of adjusting to changing conditions at a current location.
• For the modem industry to succeed, it requires efficient and innovative organisation and administration.
• The optimal site for the formation of enterprises is one that offers stronger banking and insurance services.

It’s rare to come across all of these elements at one location. As a result, manufacturing activity gravitates toward the most suitable location, where all of the factors of industrial location are either accessible or can be arranged at a cheaper cost. In general, lower production costs and lower distribution costs are the two most important aspects to consider when deciding where an industry should be located. Government incentives, such as subsidised power, lower transportation costs, and other infrastructure, are sometimes offered to encourage enterprises to locate in underdeveloped areas.

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System of Production

Inputs, processes, and outputs make up an industrial system. Raw materials, labour, and land, transportation, power, and other infrastructure costs are all inputs. The processes entail a variety of actions that transform raw materials into finished goods. The ultimate product and the revenue generated by it are the outputs. Cotton, human labour, factory, and transportation costs are examples of inputs in the textile sector. Ginning, spinning, weaving, dyeing, and printing are some of the techniques used. The shirt you wear is the result.

The link between urbanisation and industrialization

After the beginnings of an industrial activity, urbanisation follows. Industries are sometimes found in or near cities. As a result, industry and urbanisation are inextricably linked. Cities serve the sector by providing markets as well as services such as banking, insurance, transportation, labour, consultants, and financial guidance.

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Economies of Agglomeration

Agglomeration economies are the result of many companies banding together to take advantage of the advantages afforded by metropolitan centres. A huge industrial cluster emerges gradually. During the pre-independence period, there were a variety of industries. Most manufacturing operations in the pre-Independence period were located in places that were important for international trade, such as Mumbai, Kolkata, and Chennai. As a result, pockets of industrially developed urban centres evolved, surrounded by a vast agrarian rural hinterland.

Conclusion 

We conclude that Location plays a huge role in attracting and retaining the best employees, many of whom keep a close eye on where they’re based in order to optimize work-life balance. Good location decisions can significantly boost a company’s long-term performance. Poor ones can cost millions in lost talent, productivity and capital.