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Industrial belt
Industrial zone
Urban system
Central place
Industrial district
ind.vidual plant
AAAMMAAANAAMAAMM
Fig. 16.1. A hierarchy of industrial concentrations.
198
Industrial Location Theory
n o u n t ü nclensity
d of manufncturing that 1
linkagc. The basic nit js the 1akes place, and also in
terrmn
of
unction .
in an
C o n c e n l r i i
lcd ar indlividual plant
aren such as an industrial factory, wtoch,
or
whcn
istrict. wo oo
orr nmore
dlistricts Jorm n central place,cstate, forms a n irndustral
usually
such as Swind lon,
e and two o r mofe central places a
manufacturina
form a n u r b n
own
rhation
such as systm
s
mall conurbation
h i g hl a b o u r
stmall
costs
and cheap
power will not attruct
industries
component such as textiles. with a high
p b o u r ,l o w pownt attempt to devclop a theory bascd on
ost importa
h
other
atall locntions, resulting in a uniform a
n dema nlant locatcd at the point of least costs woulkd getprice,
therelore
the
and
Weber
this point,
lind
considered the most
To important influence, using a "locational triangle
he
16.2).
Reality is simrlified to Iwo raw materials-M and M, and one
point, C. The least transport cost point, P, is the point at which
Th
mption
materials and finished
(otal cost ot moviDg raw products is least. These
ke are calculated by multiplying the weight of material or product
Iransportc
ied, resulting in a 'pull' being exerted on the production
carried,distance
the
by b each of the corners of the triangle. In Fig. 16.2a, two tonnes of
point
by
-1 ton e
-2toniesS 2tonnes.
M Me M
Critical Isodapane
where Increased transport
costs balance savings on
labour costs
M Ma/
dapane would save more on labour than would be spent on extra transport
and therefore L would be a more profitable location than P. Locating at L
would increasc transport costs more than any saving in labour costs and
would not be attempted. Weber saw labour costs increasing in importance in
location because technological developments were increasing the eficiency of
transport, thus increasing the distance betwcen the transport isodapanes,
while labour costs were risingg relative to other costs.
Having combined the effects of transport and labour costs, Weber thirdly
examined the effect of industry's tendency to
A, B, C, D and E are lcast cost locatíons, but the agglomerate. In Fig. 16.4,
firms located there could
cut their
production costs by £l per unit of production if at least three of
them operated in the same location.
However, they must not incur
transport costs of, qver £l per unit of production. In Fig. 16.4, theincreased
critical
ISodapane of £l has been drawn round each producer and it is clear that
fims C, D and E could reduce their
total costs by locating in the shaded area.
Weber's attempt to find the least
how this would be transport cost location and then to exaniine
modified by other considerations has obvious
and has been criticised
for being too abstract. His
limitations,
port rates and the effects of agglomeration have been assumptions about trans
theory is questioned,
important because of its pioneering nature and its effects on but the
WTiters. The real test of a
theory is that it later
empirical studies such as w. Isard's work onshould accord with reality, and
the US steel industry and W.
Smith's work on weight-losing industries in Britain have shown the validity
of many of Weber's
conclusions.
Industrial Location Theory
203
'Crltlcal lsodapanes
Ma C
M2
M M2
Ma
Area of aggfomeration
B
A A M
Beach
t h e sellers were selling the same brand or ICe-Cream at the same price,
d the buyers who were evenly distributed on the beach, went to the nearest
Ts, hen the best location would
Decessary,half
T to avoid walking further thaneach seller ofthe beach as his market
e at the quartiles A and B, giving
Qqu nearer to u e nlddle of the beach to A.:
But seller A moved
supposing
204 Economic and Social Geography Made Simple
he would attract some of B's customers, and so the stable situation
havethe sellers standing back to back in the middle of the lcach t
were not prepared to walk over a quartcr
tionsat A and B would be the slable ones.
of ahe scllers were sellingthen
mile for ico-cream, Ioca
differ
erent
brands oficc-crenm, the one with a well-known brand would capture mor
of
themarket, and in this case the seler with an unfamiliar procuct could eithe
cut his prices to incrcasc his sales at M, or move back to one of the quarile
t ogetthe custon1 of those buyers who Were not prepared to puy the 'transpors
costs' of walking far. From this annlogy it is clear that finding the point of
maximum revenue is dependent on a number of factors such as price, trang
port costs and the possibility ofsubstitution, and that these factors will there.
fore influence the concentration or dispersal of industry.
The first attempt to develop a general theory of location with the major
emphasis on demand was made by A. Lösch in 1940. This sought to explain
the size and shape of market areas within which a location would command
the largest revenue. Lösclh simplified the world to a flat uniform plain, held
supply constant, and assumed that demand for a product decreased with an
increase in the price. If this price increase was the result of an increas in
transport costs, then demand would decrease with distance from a production
centre.
Sales = volume
Price of cone
P Distance
Market area
Quantity boundary
P production point
OP price at production point Demand curve rotated around
AQN demand curve production point to give cone
PQ quantity sold at P AQP
A no demand because price too high
market area
/Tlanee
e of Iranspert co in its price, and depentin
fing pen the
ill emerge. these
patterne are di@eren
nt patters f
alre, some of these patterns will rotatel Arnd 1 emmen
r k eanr24 tuill
o v hh o n
mum demnnd wh
c e n i r e ,
coincile,
shich should develop as forming prints of
concentrations of indtr
--
1. 2. 3.
Firms operate Competition To avoid owerlap Final pattern
with circular Increases to of circles and to of market
areas, serve all the serve alt areas, aress.
market
potential market. market areas
become hexagonal.
Ma Mp
Distance
Loss Profit
U Cost
Price
Ma O Mp
Distance
E Cost
Loss Profit
Price
Mb
Ma Distance-
Factories
o Optimal locations
Spatial margins
(b) MAP OF
FACTORIES
innpoSSiblc
t i s I i c e r
t h
ssible,
e
1o say
in monctary ternms what
the maximumvery dificult,
clh less what it will bC in five
mu profit fromm
be not ycars' time.
dclightcd, with Most firms
l o c a t i o n w i l l
tioeficd, if
tisficd profits that are higher than
S. Profitability might bereforc be scen those
analdb e S a t i
compctifors.
ct hat is
as
rclative, rather
central inthc location theories.
tlhcir
n wc of locations
n b s o l u t c
This, of course,
within he spatial margins to profitahi
t o profitability.
Wgive a vide
V en
men do do o t hav
not havc prolit amaximisation
x i m i s a t i o r as
their sole aim
d t t most witl
actual
location
c h o i c c of location within thesc margins would
depend upon
in
have personal
r certain locations, espccially those that they found congenial.
for
prelerenccs
work for
work
ds in addition to money, such as pleasant living and
for r e w a r d s
king conditions, a n d it has been argucd that these could be
men
MOst quantified a s
chicincomea n d
R o r k i n
used as a non-cost when discussing location thecory. The
of the south-western USA have been cited as an important
ic attractions of
clima
the
affecting
growth new industry there since 1945, and on the
or
side, the ttractiveness, real or imagined, of northern England has
factor in the reluctance of firms to locate theTe, despite
negatives
red as a
becn
from the government.
6aancial inducementsbe
However, it might argued that the theory that men are satisficers does
into account the fact that psychic income might simply
antsufficiently take that m a n does optimise, although for other
e anofher form of profit and in reality, satisficers might be imperfect
rewards as well as money. Thus,
variety of goals.
with a
optimisers but it must not be forgotten that locational decis-
This debate is interesting taken by firms o r government departments rather
ions are increasingly being be a
and that the decision-making process is likely to
than by individuals, as firms increase in size
a n individual one. Thus,
corporate rather than overall pattern of
decisions may result in locations which relate to the
corporate location for the single plant. Similarly,
the
the firm rather than the optimum
in industrial location decision-making
can
increasing role of governments
for social, political, o r strategic
reasons
produce sub-optimal locations
relocation
considerations have resulted in the
(Chapter Twenty-three). Defence unemployment in
plant in the USA, and attempts to reduce local
of aircraft controls over location choice.
UK have resulted in the exercise of s o m e
ne maximum profit location
choices often
countries with planned economies, in
it has been suggested that
counter to stated ideologies, although
n considerations have been
of increasing
Europe since 1956, economic mixed economies
i decision-making. In countries with
rtance in location cost-benefit analysis, which attempts to
in
ase ne UK, recent interest and disadvantages of
location decisions
n u
rather
mber
advantages in the
thanc e social considerations alone,
should lead to an increase
future.
considered in the
of fafactorsncial
of to be evaluated when location theory is
Conclusion
in this
s e e m to be some order
The world is complex, but there would
of the geographer
is to try to
Complev tasks location
mplexity, and one of the
fundamental
order to be
demonstrated.
Industrial
it is, but
mplify this reality to allow the
industry is located a s
ries have been developed to explain why however valuable thiss may o e
the ern on finding the
sis optimum location,
Economic andSocial Geography Made Simple
210
of the thcories haveno
as a Concept, has meant that many been applicah,
applicab
Recently, there has been a
when tested against reality. change of
with more attention being given
finding
to margins within which
the emphasin
locations can be made and explaining
profitahle
deviations from the optimumofitah
behaviour.
by examining decision-making
Suggested Further Reading
Chorley, R. J., and Haggett, P., Socio-Economic Models in Geography, Methurs
London, 1968.
ATheoretical Approach
Lloyd, P. E., and Dicken, P., Location in Space:York, Ecompm
to
New 1977.
Geography (2nd edn), Harper & Row,
McCarty, H. H., and Lindberg, J. B., A Preface to Economic Geography, Prentic
New Jersey, 1966.
Hall, Englewood Clifis,
Smith, D. M., Industrial Location: An Economic Geographic Analysis, Wiley, Nea
York, 1971.
Thoman, R. S., Conkling, E. C., and Yeates, M. H., A Geography of Economie
New York, 1968.
ictivity (2nd edn), McGraw-Hill, and in Economic
1ovne, P., Organisation, Location 1974. Behaviour: Decision-Making
Geography, Macmillan, London,
Webber, M. J. Indhustrial Location, Sage, Beverley Hills, 1984.