Industry

Types of industry
What are the main industry types?
Primary Tertiary Industries that extract raw materials.
The primary products may be sold directly
to customers or moved on to secondary
industries to be processed.

Industries that process and manufacture

the raw materials or assemble the
component parts made by other
secondary industries.
Secondary Quaternary
Industries that provide service or skill.

Industries that provide information and

expertise.

Employment structure
Types of industry
Weight Gain Industry:
An industry that makes products which get heavier in the manufacturing process. A good example is cars. All the
individual parts that go to make a car (tyres, windscreens, mirrors, etc.) don't weigh very much, but the finished
product does way a lot. Because of this weight gain industries tend to locate near the marketplace (their customers).

Weight Loss Industry:

An industry that loses weight in the manufacturing process. A good example is a steel which uses huge amounts of
iron ore and coke to make it. In the process of making the steel, there is a lot of waste products making the finished
Manufacturing industries product lighter. Because of this weight loss industries tend to locate near to the raw material they need because
transporting the finished product is cheaper.

Just-in-time Manufacturing (JIT):

Industries that order the supply of parts (components) as and when they need them. By doing this you can save on
storage costs, but it does mean that you have to have excellent communication and relations with your suppliers.

Just-in-case Manufacturing (JIC):

Industries that stockpile a supply of parts (components) just in case they are needed in the production process. This
increases storage costs but ensures that they never run out of parts to manufacture.
Processing industries
Footloose Industries:
Normally tertiary or quaternary industries that are not tied to raw materials and therefore don't have such strict
location requirements. Because of this, they might look for more human factors like skilled labour, good housing and
recreational facilities or access to capital.

Perishable Goods:
Products that go rotten very quickly e.g. bread, milk, cakes, fruit and vegetables. Although quicker transportation and
improved refrigeration allow perishable products to be transported all over the world for customers to receive truly
Assembly industries fresh products, these industries have to locate near their market (customers).
Industrial systems

INPUTS PROCESSES OUTPUTS

Physical (natural): Processing raw materials Products

Raw materials
Assembling component parts By-products
Energy supply
Natural transport routes Packaging Profit
Site and land Administration Waste

Human/economic:
Labour
Capital (money)
Transport
Markets
FEEDBACK WASTE
Government policies
Technology Profit or loss to be used as un
Environment input in the following year Possibly recycled as
Research & development a raw materials or
as an energy supply
Industrial system: car assembly industry

INPUTS PROCESSES OUTPUTS

Physical (natural): Assembly Vehicles

Raw materials Painting
Land Money
Energy Spraying Waste materials
Accessibility Marketing Pollution
Climate Drilling

Human/economic:
Labour
Capital (money)
Buildings FEEDBACK
Transport
Markets
Profit
Government policies
Technology Knowledge
Knowledge & skills
Research & development
Factors affecting the location of industry
Human - economic inputs: The combined influence of a
range of factors will have an
impact on the decision making
● Capital (money) of a company in terms of the
● Labour following:

● Transport and communications ● Location

● Markets ● Scale of production
● Methods of organisation
● Government policies ● The product or range of
products manufactured
● Economies of scale
● Changes in technology
● Living and working environment
Natural (physical) inputs:

● Site
● Raw materials
● Energy
● Water supply
● Natural routeways and harbours
● Climate
Location of industry
Industrial agglomeration
Agglomeration is when a number of producers in the same or related industries group themselves together.

Result Companies enjoying the benefits of external economies of scale.

Lowering the firm’s costs due to external factors.

External economies of scale can be subdivided into:

● Urbanization economies - cost savings results from urban location

● Localisation economies - reduces transport costs
○ Firms locate close to suppliers (backward linkages)
○ Firms locate close to firms that they supply (forward linkages)
Industrial estates
Industrial estate (aka industrial park or trading estate) refers to an area
zoned and planned for the purpose of industrial development which is usually
located close to transport infrastructure.

Business estate (aka office estate) refers to a more ‘lightweight’ version of

industrial park which has offices and light industries, rather than large-scale
industry.

Benefits from industrial estates:

● Reducing the per-business expense
of the infrastructure

● Attracting new business

● Reduction of environmental impacts

on residential areas

● Grants and loans

The changing location and nature of industry
1. Global shifting - from MEDCs to NICs and developing countries

2. Within a country - from traditional manufacturing regions to higher quality of life regions

3. Within individual region or country - from urban areas towards greenfield rural location

4. At the urban scale - from inner city to suburbs

Reasons to change location or close:

● Resources and raw materials they depend on may be exhausted or too
expensive to get out of the ground - steel factories in MEDCs.

● The replacement of manual workers with mechanisation - car assembly plants.

● A fall in demand for a product - Nokia.

● Increases in production costs can make a factory uncompetitive. - EU labour

costs $10 an hour, Vietnam $2 a day.

● Foreign competition - countries with lower costs of production can undercut the
prices of their competitors and cause the collapse of some industry - textile
industry in UK.

● Lack of money for new investments - Rolls Royce and the Mini were sold to BMW.
 Case study: Toyota - Burnaston Manufacturing
Plant
Location Physical factors
The Toyota factory is located in Burnaston, near Derby (Central England). Toyota is the world's Flat land: The site near Burnaston was very
largest producer of cars and opened the Burnaston factory in 1992. It employs over 2,500 flat and easy to build on.
people and has over 200 suppliers, the majority of which are from the UK. There are a number
of human and physical factors why Toyota chose Derby. Room for expansion: The site also has a lot of
room for expansion. In fact if you look at the
photograph to the right you might notice the
slightly different colour roofs, this is because
it has already been expanded once.

Greenfield site: Large parts of the site at

Burnaston had not been built on (farmland) so
there were no clean up costs.

Pleasant environment: Burnaston is right on

the edge of the Peak District National Park
which means workers can live and relax in
pleasant environments.

Human factors
 Case study: The steel industry in South Wales

Inputs:
Steel industry in South Wales ● iron ore
● coke
Owner: Tata Group from India ● limestone
Location: Port Talbot, Wales ● scrap iron

● Large, flat land for very large building to give Processes:

plenty of room for future expansion ● heating of ore to separate iron
● Port to import coal from Australia and iron ● burning coke
ore from North America ● rolling into sheets and cutting
● Coastal water used for cooling into lengths
● Government and EU incentives to locate
there Outputs:
● cast iron and pig iron
● M4 motorway links Wales to London for ● Slag
outputs
● gases: sulfur dioxide, carbon
dioxide, nitrous oxide, hydrogen
sulfide
High technology industry or hi-tech industry
Characteristics that make them different from traditional industries:
● They’ve been set up in the last 25 years
● Processing techniques which involve the use of microelectronics
● High value products
● Most advanced manufacturing techniques
● Highly skilled workforce
● Carrying out a lot of research and development

Research and product development The manufacturing of the product

Footloose industries
What are the reasons Use small light Do they favour any
for being footloose? components particular location?

Clean environment
Final products
small and easy to
transport
Close to similar
industries
Powered by Footloose
electricity that is industry
found anywhere Need highly skilled
workers

Need small skilled

labour force Good
communications

Non-polluting
Science parks
● Greenfield sites (edge of a town, semi-rural area, surrounded
by countryside)

● Modern buildings, landscaped gardens, woodland, lakes,

ponds

● Universities to provide research facilities and highly skilled

workers

What are the advantages?

● Exchanging ideas with neighbouring businesses

● Sharing the cost of maintenance and support services

● Large pool of skilled workers

What is a science park?

Science park refers to an area where hi-tech

industries group together.
 Case study: Bangalore - India’s high-tech city

International industrial business zone - Bangalore

Physical Factors
● Site
● Climate

Human Factors

● Capital (money)
● Labour
● Transport and communications
● Markets
● Government Influence
● Quality of Life

Bangalore - India's Silicon Valley

 Case study: Silicon Valley - high technology
industry in the USA
Advantages of Silicon Valley for the location
of high technology industries:
● Universities for education of workforce

● Universities for research facilities

● Companies clustered to share ideas

● Close to large urban market - San Francisco

● Airports for transportation to global markets

● Pleasant environment with close proximity to

Pacific Coast and Santa Cruz Mountains

Silicon Valley case study

Britannica: Silicon Valley

Silicon Valley