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.
There are several advantages and disadvantages in the concentration or localization of industries. They are mentioned as below. First we are going through the Advantages of Localization Of Industries.
Advantages of Concentration or Localization Of Industries
1. Subsidiary industries : Subsidiary industries are established due to the localization of industries. These subsidiary industries utilize the products and bye-products of the large industries and get profits. The main industry also gets several economies.
2. Skilled labor : Concentration of industries attracts skilled laborers. So laborers are available without difficulty. Besides the locally available skilled laborers get proper work.
3. Name and fame : Concentration of industries brings name and fame for that place. It becomes easy to sell the goods in the name of that place, For example Switzerland, Japan and Korea became very famous for certain articles. So any industry established in these countries could get good market for its products.
4. Credit facilities: Several financial and banking institutions are established in a place where industries are located. Capital which is necessary for the establishment of industry can be available at convenient rates of interest.
5. Transport and Communications : Concentration of industries leads to the improvement in the means of transport and communications.
6. Producer’s associations: The producers can establish their associations. They can discuss common problems. It becomes easy for them to solve their problems.
7. Economies of information: Localization of industries secures economies of information and publicity. The various industries of a locality can publish a trade journal arid disseminate information on various matters. They can overcome the difficulties in marketing, finance, raw-material etc.
8. Research and Training : Research and training institutes can be established. New methods .of production and new articles can be invented.
9. Specialization : Specialization and division of labor can be introduced in industries due to localization. For example the textile mills in Bombay are producing different varieties of clothes and sarees due to the specialization.
10. Utilization of resources: Resources available in a particular place can be utilized to their optimum extent due to the localization of industry. As a result Output can be maximized.
Disadvantages of Localization Of Industries
All is not well with the concentration of industries. The following problems are faced by the industries due to the concentration in a single place.
1. Excessive dependence: Concentration of industries would lead to the establishment of several industries in a particular place. If, due to any unforeseen difficulty, the industries are closed, the entire population of that locality faces trouble. Unemployment, hunger, social unrest and economic backwardness are the consequences of the closure of industries. Hence it is not wise to depend on concentration of industries.
2. Not desirable from defence point of view : Concentration of industry is not desirable from the defence point of view. In times of war it is difficult to protect the industries against external attacks or air raids.
3. Regional imbalances : Some regions develop greatly while others remain undeveloped. As a result regional feelings increase among the people. This is an obstacle to the national integrity of the country.
4. Social, physical and environmental problem: Concentration of industries leads to the emergence of several social, physical and environmental problems. Medical, health and sanitary problems also arise. Overcrowding, slum areas, congestion, growing social insecurity, high infant mortality, Traffic problems, unhygienic atmosphere, scarcity of houses etc. are some of the problems of concentration of industries.
5. Migration of Labor : Concentration of industries leads to the migration of labor from villages to the towns and cities. This affects the developmental activities in rural areas. In order to avoid concentration of industries, the Governments in several countries have been implementing various plans. The Government of India also recognized the need for checking the concentration of industries and enacted several Industrial Acts.
The Industrial Policy Resolution Acts of 1948 and 1956 were enacted and implemented by our avoid the growth of Monopolistic Tendencies in the country. Public sector enterprises in different spheres were started at different places. Industrial estates were also established and infrastructural facilities were provided for the promotion of cottage, small scale and medium scale industries in backward regions. Strategic industries were nationalized.
Thus, the Government of India has been taking steps for eliminating the concentration or localization of industries.
