Industry Location

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.