MZUMBE UNIVERSITY

FACULTY OF SOCIAL SCIENECE

(FSS)

PROGRAMME : BSC. PPM 2

SUBJECT NAME : INDUSTRIAL ECONOMICS

SUBJECT CODE : ECO 216

TASK : GROUP ASSIGMENT

GROUP NUMBER : SIX (6)

S/N NAMES REGISTRATION NUMBER

1 RIVARDO MWASIBA 13318071/T.22
2 JACOB JOSEPH 13318065/T.21
3 IRENE LUKAZA 13318002/T.22
4 LIKE MLIMAKIFI 13318053/T.22
5 EDITH NUNU 13318004/T.22
6 SABRINA SHABAN
 1. Give explanation of factors influencing the industrial location

Industry is the group of companies that are related based on their primary business activities,
producing goods or service. Industry refers to economic activities, which are connected with
conversion of resources into useful goods. Industry is concerned with the production or
processing of goods and materials. The term industry is used for activities in which mechanical
appliances and technical skills are involved.

Types of industries

i. Primary industries; These include all those activities, which are connected with the extraction
and production of natural resources and reproduction and development of living organisms,
plants.

ii. Secondary industries; These are concerned with using and processing the materials ,which
have already been extracted by the primary sector to produce goods for final consumption or for
further processing by other industrial units, eg the iron ore extracted by mining which is a
primary industry ,is processed into steel and hence, the steel industry is a secondary industry.

iii. Tertiary industries; These comprise of support services to primary and secondary industries as
well as activities relating to trade .These industries provide services facilities. These may be
considered as a part of commerce because as auxiliaries to trade they assist trade. Transport,
banking, insurance, warehousing, communication, packaging and advertising are examples of
tertiary industries.

Location of an industry: Is the geographical spread of economic activity within an economy.

However, multitude of factors influence the location decisions of firms and industries.

The following are factors influencing the location of an industries

I. Accessibility to raw materials; This is an important factor in industrial location. An

industry require raw materials for it to function better. For example industries such as
mining, forestry or manufacturing industries and many other industries tend to be located
near the source of raw materials. This helps to reduce transport costs and ensures steady
supply of raw materials.
 II. Labour availability; This means that there must be the availability of both skilled and
unskilled laborers is a significant factor in industry location decision. For example if an
industry is in need of skilled laborers it may seek locations with access to skilled
workforce such as universities or technical institutions. Also the cost to obtain the labor
such as wages, and labor regulation should supportive to get them in order to facilitate the
start up the new investment.

III. Availability of infrastructures; Access to transportation networks including highways,

railways, airports and ports is crucial for industries so as to ensure efficient movement of
goods, people as well as raw materials from the production areas to the market areas. The
presence of these infrastructure will attract the investors to establish the firms in that
place of accessibility of transportation.

IV. Market proximity; Industries have to be located near target markets so as to facilitate the
trades also for exchange activities of goods and services between the sellers and the
consumers for the sake of generating revenue and profit for the development of an
industries process. Being close to consumers reduces shipping expenses and enables
faster response to market demands, this attract the investors to establish the new
industries.

V. Power and energy availability; These support the utilization of resources through the
process of converting inputs into outputs, since the industries use the advanced and more
sophisticate machines in producing finished goods these machines need power
supply .For example, hydro-electric power in the production and energy like petrol,
diesels and kerosene for different function of the machines.

VI. Government policies and incentives; the government have great influence on the
development and location of industries through the supportive policies and incentives
such as tax breaks, grants, subsidies so as to influence the development and the location
 of an industry .Example Tanzania have influenced the location of an industries through
the industrialization policy introduced in 2017 by the late president JOHN MAGUFULI.

VII. Environmental consideration ; the location of an industry influenced by good and safe
environment regulations related to zoning , environmental protections , health and safe
standards and regulatory compliance requirements can help an industry from the
affection of feasibility of a certain industries in a specified locations.

VIII. Political stability and security: is the crucial factor that can significantly influence the
location of an industry. If there the place has peace gives the investment confidence,
because creates a favorabe business environment. And industries prefer to locate in
regions with stable political systems and institutions, this reduces the risks of political
unrest or social instability. Also the protection of property rights, regulatory consistency,
also access to government support. he political stability provide a foundation of certainty,
legal protection and supportive policies that attract industries to a particular location. It
helps create a conducive business environment, encourage long term investment.

IX. Competition and clustering: the presence of related industries, suppliers or supporting
infrastructure can create economies of scale, knowledge sharing, and competitive
advantage. So some industries may be attracted to establish the investment of industries
in the place which have other industries in order to enter in the competition to enjoy the
economies of scale. Industries often cluster in specific regions to benefit from such
synergies.
X. Climate and natural resources: some of the industries are influenced by certain kind of
climate example agriculture, renewable energy, tourism. Favorable climatic condition
such as availability of water resource, scenic landscapes can attract industries based on
the factors. In agricultural industry it should be located at the region with climatic
situation favorable to the specific crop that would be produced by the firm.
 In conclusion, the location of industries, is influenced by wide range of factors.
These factors can be categorized into economic, geographical, social, political and
industry-specific considerations. Economic factors include access to raw materiaks,
proximity to markets, availability and cost of labor, taxation policies and government
incentives. Geographical factors encompass transportation and infrastructure, climate and
natural resources and land availability. Social factors involve cultural preference, quality
of life and workforce demographics. Lastly, industry-specific factors such as
technological requirements, supply chain consideration and market dynamics also shape
the choice of location of industries.
 REFERENCE

"Industrial Organization" by William G. Shepherd and Joanna M. Shepherd

"Industrial Economics: An Introductory Textbook" by R. R. Barthwal:

"Industrial Organization: Theory and Practice" by Don E. Waldman and Elizabeth J. Jensen

"The Oxford Handbook of Industrial Policy" edited by David Bailey and Keith Cowling: