Professional Documents
Culture Documents
Location
Industries seek to set up at places where they can operate at least cost and
maximum profits
Physical factors:
1. Land
• Land is the space where people carry out their activities
• Industries prefer to set up on level land that is large in level
1. Raw materials
• Raw materials are inputs for production and manufacturing
• Primary industries prefer to set up near the source of raw materials
• Secondary industries consider the cost of transportation
• If the raw materials is heavier than the final products, they will set up
near the source, and vice-versa ( E.G. Logs are heavier than furniture)
• If the raw materials are perishable (E.G. Fish), the industry will also be
near the source
1. Energy
• Energy is the power for the factory to operate
• Industry with high energy consumption will be near energy sources
(E.G. Power plants)
• Industries prefer to be in places with a constant supply of energy
Human factors:
1. Capital
• Capital is the financial resources needed to set up and run an industry
• Industries prefer to set up a places with low capital needed
• E.G. pre-built factory spaces, low interest loans, government grants
1. Labour
• Labour is the workers needed to run the industry
• Labour-intensive industry prefer to be located near cheap and
abundant labour
• Highly-skilled labour industries prefer to be located in places with high
literacy rates.
1. Market
• Market is the demand for the products
• Primary industry???
• Secondary industries prefer to be near their markets when the
products are perishable or heavier than raw materials
• Tertiary industries prefer to be near their markets as they need to sell
their service, thus they must be convenient and accessible to people
1. Government
• The government decides the suitable type of industry, where should
they be located and how to encourage the growth of the industry
• To attract, there are financial incentives (E.G. tax exemptions, grants,
low-interest loans)
• To limit, there are restrictions such as Green Belt zones ( no pollution
industries)
1. Transportation
• Transportation is the movement of people and goods from here to
there
• Transport is used to move raw materials and products
• Industries prefer to set up at places with a cost-effective transport
system
1. Technology
• Technology is the amenities the area have
• E.G. power cables to supply power, telecommunication system to
connect people
Trend of transference
It is the global shift of large-scale manufacturing industries from 1960s to mid-
1990s.
Reasons:
1. Competitive advantage
○ Lower costs
Cheap and abundant labour in LDC’s
Cheaper land and more readily available
○ Government incentives
Tax exemption to help reduce costs
Free Trade Zones (FTZ) are areas where government
requirements are lowered and incentives are given
Special Economic Zones (SEZ) are FTZ areas set up to attract a
certain industry
○ Large market
More profits as products can be sold to a bigger market
1. Space shrinking technology
○ Reduction in time needed to travel and shipping of goods
Cargo ships are more cost-effective than air transport
They can transport large amounts of good over long distances
○ Commercial jet aircrafts
Travelling has been made much easier and more convenient
Making possible the transportation of perishable goods
1. Containerization
○ Using standard-size containers, the loading and unloading of goods
have become faster and more efficient
1. Communication technology
○ Communication is the transmission of information from a person to
another person
○ Technology has made communication between people faster and more
convenient
Impact:
1. Shift in manufacturing-related jobs from DC to LDC
○ Few workers in such industry are hired in DC, more in LDC
1. Increase foreign investment in LDC
○ More $$ goes in the country’s economy
○ When industries move to LDC, they bring along their technology
1. Increase in export of manufactured products in LDC
○ Exports of manufacturing products in LDC have increased significantly
○ More income
1. Growth of NIE
○ LDC that are affect by trends of transference enjoy rapid growth in
their manufacturing industry, resulting in industrialisation