Industry as a System

Types of Industry
There are 3 main types - PRIMARY, SECONDARY & TERTIARY.
More recently a fouth type has been added - QUATERNARY

Primary Industry
- involves RAW MATERIALS - natural resources from land or sea eg: Farming
Forestry
Fishing
Mining or Drilling
Located where the raw materials are found.

Secondary Industry
- involves MANUFACTURING- processing raw materials or assembling components.
Eg; Bicycles, Iron and Steel, Cars and tins of fruit are all examples of this.

Tertiary Industry
- involves providing some kind of SERVICE. Eg: teachers, doctors, shop keepers,
secretary, accountant, lawyer. People in this sector could be employed in either of the
other two sectors.
Eg: A factory will need accountants and secretaries.

Quaternary Industry
- involved in RESEARCH & DEVELOPMENT and ICT developments.
 Key Industrial Location Factors
Here are some of the factors a firm would need to look at when deciding on its
location:

• A suitable site (look at cost and size, type of site, flat, greenfield, brownfield,
existing or propose built factories, high profile or hidden location)
• A suitable labour force (look at skilled / unskilled ratio, number needed and
working practices)
• Industrial linkage - Links with other firms (for raw materials)
• Transport Links (for distribution of finished goods, receiving raw materials
and movement of labour)
• Government Assistance (e.g. Enterprise Zones offer of loans, subsidies,
tax incentives - provide sites. May prevent development of polluting industries.)
• Market (access to customers)
• Raw Materials (closeness can reduce transport costs).

FOOTLOOSE INDUTRY

A growing number of industries are free to locate in many locations untied by

traditional factors and their main factor may be transport. Particularly true of High
Tech industries.
Key Industrial Location Factors
YOUR KEY CASE STUDIES
Redcar Iron & Steel works - Teeside

Bianchi Bikes - Treviglio N. Italy

Nissan Cars - Tyneside

Sony Electronics - S.Wales

Samsung Electronics - South Korea

INDUSTRIAL LOCATION CASE STUDIES: BIANCHI

• Location: Treviglio, near Milan, North Italy

• Product: Bicycles and bicycle frames
Location factors:
• Raw materials: Uses component parts from linked companies. Has caused a small Multiplier effect by
attracting and encouraging the growth of component part industries eg: the wheel manufacturer. Gears
(Shimano) come from Japan
• Power: Not important – power from national grid
• Natural routes: Trevilglio is on the main east-west plain of the River Po valley and close to the main
passes over the Alps to the rest of Europe.
• Site and Land: Old location – too cramped, no room to expand and expensive
• New location – free land, flat, well drained, green field site, room to expand, in open countryside.
• Labour: Skilled labour able to commute from Milan and unemployed labour available in Treviglio.
• Capital: not a key factor, although the provision of free land must have freed up capital for Bianchi to
spend elsewhere.
• Market: This is Europewide and it has excellent links via the Alpine passes.
• Transport: Next to a number of major motorway routes to all parts of Italy, its main component
suppliers and to the European markets.
• Economies of Scale: Not a key factor.
• Government policies: The local government of Treviglio attracted Bianchi by offering it free land.
• Improved technology: Not a key factor
• Leisure activities: Not a key factor
 INDUSTRIAL LOCATION CASE STUDIES: REDCAR-LACKENBY INTEGRATED STEEL WORKS

• Location: Mouth of the River Tees, near Middlesborough, N.E. England

• Product: Iron and steel
Location factors:
• Raw materials: Iron ore, coal, limestone, water. The Iron ore is imported in bulk from Australia, North
Africa, Brazil and USA. Coal is imported in bulk from Poland. Limestone is local. Water for the cooling
process from the river Tees
• Power: Uses coal, but electricity can be provided by the nuclear power station nearby on the far bank of
the river Tees.
• Natural Routes: The river estuary provides the ideal entrepot (entry point) for the raw materials and
for the export of the finished product.
• Site and Land: Huge areas of cheap, reclaimed land are available for the storage of vast quantities of
raw materials, and the massive production plant. The integrated rolling mill is over 1km long alone. There
is room to expand and potential for further reclamation.
• Labour: Large skilled labour force nearby at Middlesborough in commuting distance.
• Capital: Large investment made by the British government to get the plant started and continuing
subsidies made during economic slumps.
• Market: Local heavy engineering industry, Nissan cars at Tyneside, Sunderland, worldwide steel market.
• Transport: Sea transport by super tanker is the most important for the import of raw materials, good
rail and road facilities also exist for national markets.
• Economies of scale: Not an important factor.
• Government policies: Very important in the initial stages to keep jobs in the area after the closure of
less suitable steel plants inland such as Corby and Middlesborough. Also linked to the government project
of attracting heavy industry to the north east, eg: Nissan Cars.
• Improved technology: Not a key factor.
• Leisure activities: Not a key factor.

Now look at the Nissan Multiplier Effect Presentation

And

Multinationals / TNC’s pdf.