What are the 7 Location Factors for the Industry?

By Balaji

Updated on: February 17th, 2023

The seven location factors that affect an industry are the availability of raw materials, labour, capital, market access, a plentiful supply of electricity, modes of transportation like railroads and roads for the transport of finished goods and raw materials, and the availability of land. An industry is a collection of businesses that are connected by their main lines of business.

Table of content

1. 7 Location Factors for the Industry
2. What are the 7 Location Factors for the Industry?

7 Location Factors for the Industry

There are numerous classifications of industries in contemporary economies. Sectors are generally used to group together larger categories of industry classifications. The 7 factors of location that might affect an industry are the availability of raw materials, labour, capital, market access, a plentiful supply of electricity, modes of transportation and land.

Raw Materials

The business’s critical materials must be close to the source
The copper mining facility must be close to the ore wherever it is.
For instance, a potato farm and processing facility need to be close to one another (P.E.I)

Markets

A business that is close to its clientele.
- Reduces costs and guarantees prompt delivery
In two situations, a company won’t set up shop close to its markets
- Lactation is more significant when the market is widespread.

Availability Of Fresh Water And Power

For the manufacturing process, large factories need a good source of water.
For the cooling process, steel factories require large amounts of water.
Large amounts of electricity are required to fabricate aluminium, so the facility must be close to an electrical source.

Labour Supply

It is crucial to have highly skilled people (near universities and colleges)
Cost and accessibility are crucial
Affordable labour
Developing countries have eliminated access to inexpensive labour.

Transportation

For the product to reach the customer, a reliable transportation service (such as rail, water, or road) is required.
Difficult to evaluate in comparison to other factors
Depending on the businessperson or individual who carries out the idea.
Ships are more effective and affordable for bulk industries.

Government

Direct – The government promotes investment by providing benefits
- Low taxes, affordable land
Indirect- enhancing infrastructure to draw in business
- For instance, a new, rapid highway where a business will be located.

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