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Secondary Factors Influencing Location of Industry

The document discusses nine secondary factors that influence the location of industry: 1) financial services, 2) climate, 3) personal preferences, 4) external economies, 5) momentum of an early start, 6) historical factors, 7) political stability, 8) special concessions and benefits, and 9) strategic considerations. It provides examples of how each factor impacts industry location decisions and notes that the importance of each factor may change over time. The conclusion states that entrepreneurs must consider all relevant factors and analyze their influence to select the most suitable location.

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Ahmad Daniel
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107 views

Secondary Factors Influencing Location of Industry

The document discusses nine secondary factors that influence the location of industry: 1) financial services, 2) climate, 3) personal preferences, 4) external economies, 5) momentum of an early start, 6) historical factors, 7) political stability, 8) special concessions and benefits, and 9) strategic considerations. It provides examples of how each factor impacts industry location decisions and notes that the importance of each factor may change over time. The conclusion states that entrepreneurs must consider all relevant factors and analyze their influence to select the most suitable location.

Uploaded by

Ahmad Daniel
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SECONDARY FACTORS INFLUENCING LOCATION

OF INDUSTRY
Secondary factors include:

1. Financial services,
2. Climate factors,
3. Personal factors,
4. External economies,
5. Momentum of an early start,
6. Historical factors,
7. Political stability,
8. Special concessions and benefits, and
9. Strategical considerations.
1. AVAILABILITY OF FINANCIAL SERVICES INFLUENCE
INDUSTRY LOCATION
An important factor, which influences the location of the plant, is the availability of financial
facilities. Adequate finance is required for the purpose of carrying out the business activities
successfully. But capital being more and more mobile, now-a-days location of an industry may
not be rigidly influenced by availability of finance in an area. Finance can be brought from other
areas to locate the industries in a region otherwise deemed suitable.

2. CLIMATE FACTORS INFLUENCE LOCATION OF


INDUSTRY
Suitable climate is an additional factor influencing the location of industrial firms. Some of the
most important climate factors that are to be considered are the level of ground, topography of
the region, drainage facilities, water facilities, disposal of waste product etc.

For example, in case of cotton textile industry, humid climate provides an additional advantage.
Therefore Mumbai in Maharashtra, Coimbatore in Tamil Nadu and Manchester in London with
humid climate are suitable for cotton textile units.

The topography of a region leads to a reduction in the transportation cost. So it must also be
taken into consideration. Similarly, if the steady supply of water is required for any
manufacturing process, such industry must be located where water is abundantly available.

3. PERSONAL FACTORS INFLUENCE LOCATION OF


INDUSTRY
Sometimes locations are the result of personal factors. An entrepreneur may have personal
preference towards certain localities. Such personal preferences may be of a love for the
hometown, a desire to develop his native area etc. For instance, Mr. Ford started the manufacture
of motorcars in his hometown i.e. Destriot. But this kind of location is generally rare.
4. EXTERNAL ECONOMIES INFLUENCE LOCATION OF
INDUSTRY
External economies are those economies, which arise out of the growth of some specialized
subsidiary activities. For instance, if a large number of industrial units engaged in the same line
of activity are located in a particular area, that can be an additional encouragement for the new
entrepreneur to start their industrial units in that particular area.

5. MOMENTUM OF AN EARLY START INFLUENCE


INDUSTRY LOCATION
Once an industry has been started in a particular area and it has been successful, the business
people develop a sort of attachment to that area. Consequently, other units are attracted towards
that area. Subsidiary units and other servicing units also grow up. All these factors give
momentum to the growth of new industries in such an area.

6. HISTORICAL FACTORS INFLUENCE LOCATION OF


INDUSTRY
Historical factors also in many cases lead to the development of a place as the centre for an
industry. For instance, in India, industries have flourished in Kanpur arid Mumbai because of
historical coincidence.

7. POLITICAL STABILITY INFLUENCE LOCATION OF


INDUSTRY
Political stability also exerts considerable influence in selecting the location of industries. The
lack of political stability of the State will adversely affect the industries located there. Further, he
must also see whether the labour market is not under the control of trade unions. In fact, many
industries are moving-from West Bengal and Kerala only due to the adverse trade union
activities prevailing in those states.

8. SPECIAL CONCESSIONS AND BENEFITS INFLUENCE


INDUSTRY LOCATION
Various assistance given by the Government in order to encourage the industrialists to set up
their industries in certain areas also play an important role while selecting the location of
industries.

For example, establishment of units in backward areas. Further, most of the State Governments
in India are offering various incentives for the rapid industrialization of that State by encouraging
the setting up of industrial units. These incentive include subsidies, tax concession,
transportation facilities, financial assistance etc.

9. STRATEGICAL CONSIDERATIONS INFLUENCE


LOCATION OF INDUSTRY
Strategical considerations are another factor, which exert a greater influence on locational
decisions. During periods of war, the air attacks would be aimed at the places where the defence
materials producing factories are located. Hence, such industries must be located at a place
where there is a remote chance for air attacks.

CONCLUSION
To sum up, all the factors, which we have discussed above as important factors responsible for
the location of an industrial unit do not remain important at all, times.

A factor, which is considered as more important at one point of time, may lose its importance at
another time and vice versa. Hence the entrepreneur must take into consideration all the factors
and analyze its extent of influence and select a suitable location.

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