Localisation means the concentration of a certain industry in a particular area, locality or region. Localisation is related to the territorial division of labour, that is, specialisation by areas or regions. A certain town or region tends to specialise in the production of a particular commodity.
We have certain cities like NewYork (wall street) Silicon Valley (technology) Las Vegas (fun city) Hollywood (movies) Texas (Oil and farming) Lagos (maritime, digital marketing, corporate world) Abuja (politics) Owerri (Hospitality)
Location of an industry may be defined as the idea and practice of establishing an industry either by government or an entrepreneur in a given area for economic, geographical, social or political reasons.
As we know, several factors govern the location of an Industry. But we have to remember that these factors are dynamic in nature. We can’t say that an industry will always remain in a particular place. Availability of new raw-materials, improvement in technology, development of new areas etc. influence the localization of industries.
Causes of Localisation:
What factors influence the location of an industry in one area rather than in another? “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 causes may be enumerated as under:
(1) Climatic Conditions:
Climatic or soil conditions in certain areas are suited for the production of a particular product. Such an area has got an overwhelming advantage over other areas. If efforts are made to develop other areas by artificial means, the cost of manufacture would be very high. This is the reason for the concentration of tea industry in Assam and North Bengal and of coffee industry in the Nilgiris.
2. Nearness to raw materials
Certain industries are localised within an area because of the raw materials used to make the products that the company produces, this helps them to reduce the cost of logistics and transportation of the raw materials to their factory, company and area of production.
3. Nearness to skilled personnels/ trained labour
Most industries are located in a location where they can easily hire labour, imagine a maritime company located in a landlocked area, not only are they far from their source of raw materials but who would want to learn about maritime in a landlocked country?
4. Nearness to Power:
This is very important especially in a country where there isn’t uninterrupted power supply, you need to be strategic about your location, power is a major factor that determines how well your business world turn especially if one is into the hospitality industry, production, manufacturing etc.
5. Momentum of an Early Start:
Sometimes no particular cause is at the root of the location of an industry in an area. The industry just happened to be started there by some enterprising businessman sometime back. It grew in strength from the momentum gained from that early start. The Ludhiana hosiery industry owes its present position to this cause. We can also see this in the scenario of the Silicon Valley.
6. Political factors
Certain industries are localised because they political tariff, taxes, laws are favourable to them, levies also can make certain industries to be localised or decentralised depending on how favourable these laws are, recently a city in Nigeria banned commercial motor bikes, this had a major hit on delivery companies, Government laws on cryptocurrency, money related issues also have an effect on industries.
7. Specialised Transport:
Means of transportation may have become specialised and adapted to the needs of that particular industry. For example, railway sidings may be made available by the railway authorities. This facility attracts further concentration of the industry in such areas.
8. Subsidiary Industries:
Many subsidiary industries grow up in this place. The main industry draws valuable support from these. Subsidiary Industries can be found in a location where the main industry is located. A Brewery localised area can have bottling companies located around its vicinity as well.
A Maritime localised area can also have clearing and forwarding agencies because of the nature of their work
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