Location of Industry

Factors affecting the location of industry in the UK are as follows.

Here are some of these factors below

Originally the major manufacturing industries were located to minimise costs of transport and to make use of natural resources. In the early nineteenth century the iron industry expanded in Sheffield because of the proximity of ore, coal, clay and mountain streams (which provided a power source). By 1900, steam and electricity powered the machinery and larger works were laid out on flatter land nearby. This meant that the product could be distributed by canal and rail. Steel is still produced in the area because, although the city location no longer gives a cost advantage, the technical skills of the work-force are important.

The growth of motorways has made transport cheap and flexible, allowingmanufacturing industry to move from its traditional areas nearer to major markets.

The availability of government grants has become an increasingly important influence – for example, Enterprise Zones have tempted many firms to relocate. Central government has played its own part in locating some of its own activities outside the south-east (for example, locating the National Girobank in Bootle and the DVLC in Swansea).

There is a growing trend for high-tech firms to locate in areas offering moreadvanced technological support (for example, Swindon and the M4 ‘Silicon Valley’ syndrome, where local colleges complement the firms with training sessions for work-forces).

Arguably, the availability of a large and well-trained work-force is not asimportant as it used to be because of the move by many firms towards more capital-intensive production. Another reason is the increasing acceptance by employees that they have to commute to work (which, of course, causes transport problems). If a firm decides to relocate it may need to offer a range of financial inducements to encourage its work-force to move with it. Conversely, a labour-intensive firm may be tempted to move to an area of the country with relatively low wage costs.

Firms involved in ‘weight gaining’ production (such as breweries) are usuallylocated close to their markets. Those involved in ‘weight reducing’ productions (for example, sawmills) have been located close to the supplies of these materials.

Some firms are greatly influenced by the population distribution of theirpotential consumers (consequently locating close to densely populated areas). There are arguments against this, such as property and land costs.

In certain industries pressure groups can operate both in a positive andnegative way. The Nimby attitude (‘not in my backyard’) to the location of firms involved in less-attractive industries such as toxic waste is an example of a negative attitude. A more positive example can be seen in the fairly recent past when areas of the north-east offered substantial inducements to persuade foreign companies to invest in that area, e.g. Toyota.

The existence of external economies of scale acts as a stimulus for firms to base their production in certain areas: the UK car industry, for example, has largely been based in the Midlands, thus leading to a supply of skilled labour and component manufacturers in that area.

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