Factors which influence the localization of firms
- Industrial inertia. This is the tendency of the existing firms to remain established in a given area even when the location factors are exhausted.
- Availability of ready market. The already established firms may provide market for the incoming firms and the new firms may provide raw materials for the already established firms and therefore such firms may decide to localize in one area.
- Power supply. Availability of cheap and constant power supply may lead to the concentration many firms in one area.
- Availability of enough land. When land is available and cheap, many firms concentrate in that area because of the existence of room for expansion.
- Availability of supply of skilled and unskilled labour. When labour is readily available, and in large quantities, many firms may be established in that area hence localization .For concentration of many firms in Kampala.
- Security and political stability. Localization of firms may be due to constant security and political stability which attract many firms in a particular area.
- Availability of water supply. Water is needed for industrial purposes in various ways, for example, it is used an input, for waste disposal, a cheap means of transport etc. This can attract firms to concentrate in such an area so as to minimize on production costs.
CATEGORIES Economics
TAGS Dr. Bbosa Science
