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Localisation Of Industries

Localisation of Industries

Meaning

            Localisation means the attentiveness of a definite industry in a specified area, locality or region. It is related to terrestrial division of labour that is specialisation by areas or regions. A certain city or district tends to specialise in the production of a definite article. Switzerland specialises in watches, Brazil in coffee and India in tea. In India, iron and steel industry is deliberated in Bihar, tea industry in Assam, Cotton textile industry in Maharashtra and Gujarat etc.

Causes of Localisation

            “When a firm chooses its location it may be influenced by a wide range of factors from the relative costs of alternative sites to the irrational whims of the businessman. Fancy and chance play a part; liking for a particular district, the accident of having been born in it and so on.”

But all factors are influenced by low costs of production and minimum transport costs. These grounds may be itemised as under.

  1. Weather Conditions – Weather or loam conditions in definite areas are suitable for the manufacture of a certain article. Such a location has got a devastating sophistication over other locations. If efforts are made to develop other locations by unreal modes the cost of manufacture would be very high. This is the reason for the concentration of coffee industry in the places like Brazil.
  1. Nearness to Raw materials – Nearness to raw materials is a governing factors in the place of a factory particularly that industry which uses bulky raw materials that are high-priced to mobilise and looses heaviness in the manufacture course. The focus of iron and steel industry in Bihar is due to the availability of iron ore and other smelting materials there.
  1. Nearness to Sources of Power – This is one more cause of localisation of industries. This describes the focus of iron and steel industry near the coal fields. The farther coal is taken away from coal mines the higher become the costs of transportation. But with the progress of hydro-power and atomic-power, coal as a basis of power has turn out to be less significant as the former can be taken to hundreds of miles with relatively less costs. The focus of cotton textile in Indian city Mumbai is due to establishment of the Tata Hydro-electric works.
  1. Nearness to Markets – Before beginning an industry an entrepreneur has to take into consideration the market potentialities of his product. If the market is quite away from the place of manufacture, transport costs will be high which will raise the selling price of the product in comparison with other similar products which are manufactured near the market. The former will thus decay soon. Alternatively export-oriented industries are focused near the port towns because the transport costs of carrying exports to the ports are low for such industries. Moreover, industries also likely to be focused around railway junctions because their products can be transported to the other regions with lesser transport costs.
  1. Adequate and trained labour – Industries are likely to be focused on those places where sufficient supplies of trained labour are available. New industries are also attracted to such areas.
  1. Availability of Finance – Money is the life of any industry. Industries are situated on those places where banking and financial facilities are effortlessly obtainable. As a matter of fact capital is attracted to those areas where industries are localised which in turn, attract more industries.
  1. Momentum of an early start – Sometimes an industry is focused at a specific location merely by chance, or due to impulse of the entrepreneur or due to his affection to that place. The setting up of the motor car industry at Detroit in America by Henry Ford and at Oxford in England by William Morris was due to their regards to these locations as their place of birth.
  1. Political Patronage – Political grounds have the greatest manipulation in the concentration of industries. The benefaction given by the religious rulers led to the focus of definite industries in certain places. In the recent years the various dispensations endowed by the state in the form of cheap land, credit, power and transport facilities have led to the improvement of new industrial centres.

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