1. Site and situation factors of industry
AP Human geography
Industrialization and economic development unit

4. Factors affecting distribution of industry
Site: physical characteristics of a location
Deals with industry’s factors of production
Land, labor, capital
Situation: location relative to other things
Deals with industry’s proximity to markets and inputs
Bulk-gaining vs. Bulk-reducing

5. Site factor 1: Land Factories are usually rural, suburban, or foreign
Large tracts of cheap land for one story buildings
More energy efficient and cheaper
Lower electricity rates
Less environmental regulations
Tax incentives offered by state, county, city governments
Modes of transportation are critical factor – rail, road, river, etc.

6. Site factor 2: Labor Most important site factor
Labor intensive industry: labor is a high percentage of the expense
Agriculture, coal mining, construction, textiles
Skilled vs. unskilled
Skilled workers likely in MDCs in cities with high number of colleges or college graduates
Unskilled workers likely in LDCs due to cheap labor costs

7. Hourly Wages for Countries The global division of labor: companies hire out foreign workers to aid in the manufacturing of a single product (selective transfer of jobs)

8. Site factor 3: Capital
Manufacturers need to borrow money to establish new factories or expand existing ones
Examples:
Automotive industry concentrated in Michigan due to availability of banks to provide loans
High tech industry of Silicon Valley (California) and Research Triangle (North Carolina)
2/3 of these companies fail
¼ of all capital in U.S. is spent on new industries here

9. Situation factor 1: Location near inputs
Bulk-reducing industries
The finished product weighs less than inputs
Ideal location is near the inputs due to high transportation costs
Easier to transport good to market than input to factory
Examples:
Steel industry, copper industry

10. Steel mills are located close to the source or iron ore and coal, which are both used to make steel.

11. Situation factor 2: Location near markets
Bulk-gaining industries
Final product has more volume than inputs
Ideal location is near consumers due to high transportation cost of finished product
Examples:
Soft-drink bottling, automobile assembly, breweries,

12. Beer: inputs heavy to transport
Beer: inputs heavy to transport. WATER IS EVERYWHERE - produce near customers.

13. Transportation Ship, rail, truck or air?
Choose cheapest according to weight and distance shipped
Trucks = short distance
Trains = long distance
Air = small bulk/high value; fast but costly
Ship = slow, but very low cost
Break of bulk point: location where transportation among many modes is possible
Truck, train, ship, and/or air

14. Break of Bulk Points
Houston
Hong Kong
Rotterdam
Singapore