JC Factors Affecting the Location of Industry

An industry is all the factories of which the industry is composed. For example, there are many different brands of shoes all of which are made in different factories. The collection of all these shoe factories is called the ‘shoe industry’.

A ‘factor’ is something that influences something else. The sentence ‘factors affecting the location of industry’ means ‘the influences on where an industry decides to locate’.

Some industries chose similar places when deciding where to locate their factories. For example, bread factories are often located very close to or in towns. Chemical factories are often located away from towns.

For the Junior Cycle, you need to be able to name all the factors that affect where an industry decides to locate. You also need to be able to say how these factors influence where a factory locates. When you write about these factors, you must include the word ‘locate‘ or ‘location‘ in your work. Lastly, you need to be able to pick good locations for factories on OS Maps.

1. Raw Materials

Raw materials are the inputs to a factory system. The factory processes these raw materials into the finished product which is then sold to market. Factories usually locate close to the source of their raw materials. This is because the cost of the raw material includes the cost of transporting it to the factory. By locating close to the raw material, a factory can reduce the cost of manufacturing its products.  This is especially the case for heavy industries which use bulky (takes up a lot of space), expensive-to-transport raw materials. If the finished product is bulkier than the raw materials, a factory will locate close to its market to reduce the transport cost of the finished product.

2. Labour 

Labour is the workers in a factory. All factories depend on labour. Some factories use low-skilled labour and others used highly skilled, specialist workers. The largest number of workers live in or near towns. Therefore, factories locate near to towns and cities, often in industrial estates, to be close to workers. Factories owners like to keep the cost of their labour (wages and salaries) as low as possible. Therefore they might locate in a country where wages are low. However, if a factory needs highly skilled workers, the factory might change location to access the skilled labour they need.

3. Markets

“Market’ the the term used to describe all the shops and other places where manufactured goods are sold. All finished products need to be transported to market. Therefore, factories often locate close to their market so that the cost of transporting the finished product is reduced. For most factories, this means locating near a town or city. If the factory is exporting its finished product, it may locate near a port or airport so as to access foreign markets easier.

4. Transport

All factories use transport networks to access their raw materials and to get their finished products to market. Factories need quick, efficient transport so as to lower the cost of transporting their goods. This means most factories locate near to major transport routes. This includes railways, motorways, ports and airports.  Factories can choose which transport routes to locate near depending on their raw materials and on what they manufacture. Heavy industry often locates near a sea port where there is plenty of land to store raw materials delivered by ship. Light industry may locate near a motorway or an airport for quicker transport.

5. Capital

‘Capital’ is another word for ‘money’. In the past, factories often located near cities so that they could more easily access banks. This made it easier to borrow money to help finance the running of the factory. Today, with modern internet banking, it is easier for factories to locate in other places without needing to be near a bank.

6. Government Policies

A ‘policy’ is a rule or guideline used to help people make decisions. The Irish government has a strong policy of encouraging foreign companies to locate in Ireland. The government provides grants to these companies if the locate in certain places. This helps bring employment to these locations. The government policy also provided industrial estates just outside towns where factories could locate. Some government policies restrict or stop factories from locating in certain places. For example, a chemical factory would not get planning permission to locate in a housing estate.

7. Personal Preference

Often, a factory will be located in a place simply because the owner has a connection with that place. The owner might live there or have some other family connection. For example, Henry Ford’s grandfather came from Cork. So when Ford Motor Company was setting up in Ireland, it chose to locate its factory in Cork.