INDUSTRY

Industry is a form of commercial activity (money making).

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Industrial Systems
An example of an industrial system- Textiles manufacturing

Factors affecting the location of industries

Even though all industries can be seen as a system, they can be very different.
Industry can be…..

Large scale or small scale- depending on the size of the factory/plant and
numbers employed
Heavy or light- Depending on the wieght of the finished product
National or Transnational- Depending on whether the industries operations stay
in one country or are spread across several countries
Depending on the type of industry, different factors must be considered about
where to locate the industry
CASE STUDY: NIKE manufacturing in Indonesia- Where and why?
Nike trainers and clothes are sold and worn throughout the world. Nike is a typical
transnational corporation (TNC). Its headquarters are in the USA, where all the
major decisions and research take place, yet its sports shoes are manufactured in
many countries around the world.

Nike’s main activities are in South-East Asia, and up until recently it manufactured
many of its trainers in South Korea. In the late 1980’s labour costs in South Korea
rose, so Nike decided to move production to Indonesia where costs were lower.
A map to show the islands making up Indonesia

Nike employs 30,000 employees across several factories in Indonesia including

factories in its capital Jakarta.

Why is Indonesia an ideal location for Nike’s manufacturing industry?

– Cheap labour costs (workers in Indonesia will work for relatively low pay)

– Easy transport to large markets in Asia ( Malaysia, China, Japan)

– Flat land in Jakarta and other locations such as Bandung to build large factories

– Raw materials Rubber needed for trainers and cotton needed for textiles is
available from other Asian countries near by such as Malaysia

– Government incentives- The government of Indonesia has made it easier for

large TNCs to set up in Indonesia , by offering grants to set up in locations with
high unemployment.

High Tech Industry

  High-technology industry uses the most advanced technology to make
products (computerised systems etc)
 They involve a highly-skilled workforce and its products require a high
proportion of research and development.
 High-technology industry is relatively footloose since access to raw
materials is not very important. The ‘raw materials’ that are required are
usually lightweight electronic components.
Look at the table below which shows an industrial system for High Tech Industry
CASE STUDY: High Tech Industry in Silicon Valley- Where and Why?

Silicon Valley is the name given to the area where group of high-tech
industries which have developed in California, USA
 Silicon Valley was the first area of high-tech industry to really develop
Where is Silicon Valley?

Why is Silicon Valley an ideal location for High Tech Industry?