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Industry Location

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Factors affecting the location of industry include

  • Capital / Finance
  • Raw Materials
  • Government Policy
  • Energy / Power
  • Land
  • Labour / Skilled workers
  • Markets
  • Transport

Capital

  • Heavy industries and high-tech industries need the most capital.
  • It is more likely to influence the choice of country/region as opposed to the area within it.

Raw materials

  • It is ideal for industries to locate close to raw materials as they are often cheap to buy and expensive to transport.

Site needs

  • Heavy industries need lots of land which is flat and cheap.
  • Light industries will need less land and may be more concerned about how the factory looks to impress clients.

Energy

  • Heavy industries need lots of energy.

Labour

  • Hi-tech light-industries may need to locate close to universities/colleges as they often require skilled workers.
  • Heavy industries may choose to locate in areas of high unemployment as it is easier to employ people.

Government

  • The higher the capital investment, the more attractive a government loan becomes.
  • Government incentives are often reserved for areas of high unemployment.

Market

  • If the products that a factory produces are large and heavy, it is easier to locate close to markets where the goods are likely to be sold.

Transport

  • Transport costs are important for all industries as it can become very expensive to transport certain goods.

Other communications

  • The use of the internet and email has meant that more people can work from home and there is a greater freedom for a location worldwide.