LOCALISATION OF INDUSTRIES, BENEFITS AND DEMERITS.

Localisation of industries is the concentration of industries (Firms of a particular industry) in a particular location or area.

There are towns known for certain goods, certain services, like Onne (known for marine services) Owerri (known for the hospitality industry), Aba (known for shoemaking, textile), Lagos (music etc)

There are factors responsible for this occurrence which ranges from

✓Climate of the area
✓Availability of raw materials
✓Source of Power
✓Availability of Labour
✓Availability of Capital
✓Nearness to Market
✓Political factors (policies, grants,tariffs)

Advantages of Localisation of Industries are

1. Helps to improve the labour market. It causes those who live around to pick up skills relevant to that industry to increase their employability

2. It brings about migration of people into that area and thereby bring about Development of that area or town

3. It brings prestige to that location. That area becomes well known for producing that good or service.

4. Facilities are birthed to help with the production, distribution or transportation. Banking facilities could be established to help with payment, as well as transportation facilities and repair facilities of the tools and machineries associated with the production.

5. It creates an environment that encourages trade unions to be formed, it is easy to fight for their interest since everyone there is into the same product or service.

6. Division of labour is easier, when the work gets too hectic, it can easily be reassigned or delegated. A firm asked to produce 1000 goods can easily collaborate with a firm closeby to meet up the deadline.

7. It is easier for the skills to be learnt and passed on to Generation to come. Because there are so many people into the Same Production in that locality, the firm can easily be created and duplicated.

Disadvantages of Localisation of Industry

1. It is easier to attack during war periods and any attack on that area would cause a ripple effect to the nation. Example is the World trade centre, Pearl Harbour attack, the Great Depression (although this was caused by the crash at Wall Street)

2. It facilitates increase in the standard of living which results in high cost of living over time.

3. Any change in taste, fashion, trend or a decline in the demand of that Product or service can affect the functioning of all the industries in that area.

There are few ways to take advantage of a localised Industry. One of which is by selling complimentary and substitute goods closeby.

I’ll explain….

Complimentary goods are goods that go hand in hand with that Product. If Ankara is a product localised in an area, one can choose to sell the accessories that are worn with the Ankara

Someone Is selling television in your locality, you can sell decoders such as the DStv, Gotv, Star times etc

If there are many tailors in your area, why not sell buttons, threads, needles, sewing machines etc

While Substitute goods are goods are goods that can replace a product (it can be used a substitute for that Product)

Corn flakes can be used as a substitute for golden morn, chicken can substitute goat meat and cow meat. Sandals can substitute shoes.

Sometimes it is better if you’re one who is selling in a localised Industry in an area to arm himself or herself with both substitute and complimentary goods.

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