INDUSTRY

An industry refers to all forms of economic activities concerned with the extraction of raw materials,
production of goods and provision of services. A factory is a building where machinery and labors use
raw materials to produce outputs.

Industries are classified into;

1. Primary industry – These are industries that are concerned with the extraction of raw materials
from the natural environment. They tend to make a larger portion of the economy of developing
countries than they do for the developed countries. They include farming, forestry, fishing and
mining.
2. Secondary industry – These are industries that processes the extracted raw materials are to
produce finished products. They include food processing, beverages, car assembly,
manufacturing and construction
3. Tertiary industry– These are involved in service provision to the public. They include transport,
retail, hospitals, education, catering
4. Quaternary industry-they are aimed at provide specialist information and expertise to all
sectors. They spend much time in research to develop new innovations, design engineering and
computer programming for new innovations. They include research and development agencies,
vocational education, business consulting, information technologies.
Other classifications
Size – small scale and large scale
Nature of processes – heavy (e,g iron and steel) light industry computer manufacturing
Location – close to raw materials or close to market
Capital intensive or labor intensive

Industry as a system or characteristics of industries

Inputs – are the elements that are required for the processes to take place. They can be divided into
two; physical inputs, these are the naturally occurring things such as water, land, trees while human
inputs include labour, skills, technology, market, building, and money

Processes - are the activities that take place to change the raw materials into finished product. For
example, in the car industry, processes include assembling different parts to make up the car, furniture
industry all processes required to change wood into a chair. For example, Dairy farming processes
include grazing the animals, milking, storage, packaging and transporting.

Outputs – the finished products that are sold to customers and sometimes by products may be
produced. This is something that is left over from the main production process which has some value
and therefore can be sold. Waste product are the things produced but with no value and must be
disposed of or sometimes used by other industries as raw materials. Thus outputs may be both positive
when profits are made or negative when loses are made. Examples of positive outputs are milk from
dairy farming, juice from fruit production, clothing from wool and by products make include animal dung
from animal farming. Negative outputs include dead animal, soil erosion, deforestation
Feedback – it is what is put back into the system. The main two examples are money from the sale of
finished product and the knowledge gained from the all the processes. This knowledge could be used to
make the product better or improve the efficiency of the system

Class work; produce an industrial system diagram for any two economic activities

TYPES OF SECONDARY INDUTRIES

Manufacturing industry it involves converting of raw materials to produce out puts that are
immediately available for consumption or sale often on a large scale.it uses more of mechanical
techniques to produce the outputs. To manufacture mean to make. Modern industry has a very dynamic
and technical nature, it is characterized by increasing efficiency, output, complexity and technology as
well as changes in demand, raw materials and in the location of production sites. It involves turning raw
materials into usable products by the society. Examples include, welding and fabrication, textile
industries, furniture industries, shoe industries, iron and steel

Processing

Processing industries are also based on the direct processing of raw materials, however processing is a
broader term than manufacturing as it involves a series of mechanical and chemical processes to change
and preserve the products. They involve processes that are either continuous or occur on a batch of
materials that is indistinguishable. For example, a food processing company making fruit juice may make
the juice in a continuous uninterrupted flow from receipt of the fruits to grinding, stirring and adding of
chemicals and preservatives through packaging and transporting. These industries are often located
close to raw materials. Process manufacturing is common in food production, beverage, chemical, and
consumer packed goods.
Assembly industries

Assembly industries put together parts and components that have been made elsewhere in order to
build up a final product. A large car assembly plant is a good example of assembly industry is car
industry. Today the processes in this industry are performed by computers and less human labour is
required.

An example of assembly industries- Car assembling company

High technology industry

A high technology industry is one which makes products that are very sophisticated involving a great
deal of scientific research and development. The industry always looks to improve its products and
employ high skilled labour. These have a wider choice of location and are often described as footloose
industries.

These industries are characterized by;

- High inputs of scientific research and development

- Innovative and technologically advanced products
- A highly qualified workforce with high proportion of professional engineers and scientists
- Well developed communication networks
- Good scientific infrastructure
- Advanced markets for business and information services

It is the fastest growing industry manufacturing industry in the world. It began in 1960s in Silicon Valley
south of san Francisco since then it has spread across the world. High technology companies use or
make computers, software, robots, medical instruments, pharmaceuticals, telecommunication
equipment, aerospace components, industrial control systems, testing and measurement systems,
electronic games.

These companies put a great deal of money into more scientific research. The aim at developing newer
and more advanced products. E.g latest products from Apple, Samsung, Sony. They are often found in
close proximity to leading universities because of the need to employ well qualified graduates in science
and technology and be aware of the latest research taking place in universities. It also helps them to
collaborate easily on joint projects and highly skilled workers can move from one company to another.

FACTORS AFFECTING THE LOCATION OF INDUSTRY

There are various factors that affect the location of an industry, the table below summarizes these
factors;

Physical factors Human factors

Land – the availability and cost of land is
important in deciding the location of an industry.
Large industries in particular will need flat which
is easy to build on.
Raw materials – most industries choose to locate
near the natural resource they use for the
production. This helps the industries to reduce
cost of transporting these raw materials.
Energy- industries need to locate close to reliableforce, these are labour intensive. So they need to
and cheaper sources of energy for its proper
operations. Energy hungry industries such as
metal smelting may be drawn close to cheap HEP
or coal mines. Energy is needed to operate the
machinery in the industries.
Climate- Harsh climate is not suitable for
establishment of some industries. For example,
cotton industry requires humid climate because
thread breaks in very hot climate
Water- water is another important requirement
for industries. Many industries are established
near rivers, canals or lakes because they need
large quantities of water for cooling their
machines. They also need the water source like
rivers to dispose their waste products
Their combined influences on location, scale of production, methods of organization and the products
of the system.
Capital- it may be in two forms;
- Working capital – cash that can be used
to purchase raw materials or pay the
laborers.
- Physical or fixed capital- includes the
building or equipment owned by the
industry
Labour- sometimes industries need large labour
locate close settlements. Labour is needed in
industries to operate machinery and handle other
tasks that the machinery cannot do.
Market- once products are manufactured they
need to be transported to shops and customers.
The further away they are the higher will be the
cost.
Transportation and communication-good
transport links are needed for raw materials to be
brought in and finished products to go to the
markets. Large companies will choose to locate
close to motorways junctions, railways and ports
to cut the costs of transportation
Government influence- government policies and
decisions can have a big direct and direct impact
on the location of the industries mainly for
proper planning purpose of the land and
concentration of the negative effects of the
industrial operations.
Quality of life- highly skilled personnel who have
a choice about where they work will favor areas
where the quality of life is high (leisure facilities,
good housing, attractive scenery)

Location - companies decide on particular locations for a variety of reasons. Most will look to location
that is seen as the ‘least cost location’ or the ‘highest profit location’. An excellent location results in
more profits and may prompt a company to expand. If an area has high labor supply, raw materials,
cheap land and is easily accessible more companies will choose to locate in that area.

Scale of production- the quantity of a product a company plans to produce will be an important factor in
deciding location. The availability of market, quantity of raw materials, labour and energy supply will
affect the size scale of production of the industry. More market, more raw-materials more good swill be
produced to meet the demand
Methods of organization – companies can follow various methods of organization from traditional to
highly innovative. Depending on various factors such as capital. If an industry has more capital it can be
able use heavy machinery than another industry with less capital. The most advanced companies in an
industry tend to be very capital intensive while more traditional companies tend to be more labor
intensive. Amount of energy available will determine what methods of production location with small
energy sources more people are employed to meet the operation demand.

The Product or range or products manufactured – Many large companies produce a range of products.
type of raw materials available and availability of market for the products will influence the products to
be produced by the industry, if the market has demand for wider products more products will be
produced. Availability of wide variety of raw materials will allow more products to be produced.

Changing the location of industries

- Cheap labour- Recently there has been a global shift in manufacturing industry from the
developed world to NIC due to the availability of cheap labour in other countries, thus industries
may move from one location to another in search of cheap labour and profit maximization. E,g
NIKE is an American company but it has most of its industries outside America.
- Availability of markets – industries within or between countries may change location in order to
be close to the markets of their products thereby reducing the transportation cost of the final
product. Sometimes an industry will change location due to competition with other companies
selling similar products so it moves to an area with less competition
- Extinction of raw materials – sometimes industries may change their location due to the
extinction of raw materials that it requires for its production.
- Government incentives – government may encourage industries to move to another area for
various reasons. Government may encourage some industries to move to rural areas so as to
reduce the rate of rural – urban migration and its negative effects
- High land costs- the inner cities have high city rates compared to the outskirts. Industries may
be compelled to move from the inner city regions to the outskirts where the cost of the land and
rates are lower.

Industrial agglomeration or zones

It is an area zoned or planned for the purpose of industrial developments, or where more industries are
concentrated in one area. They may be found in a range of locations from inner cities to rural areas
where different forms of transport systems meet. The logic behind industrial estates includes;

- Attracting new business by providing an integrated infrastructure in one open location

- Separating industry from residential areas to try to reduce the environmental and social impact
- Concentrating dedicated infrastructure in a small area to reduce the per business expense of
that infrastructure.
- Eligibility of industrial estates for grants and loans under regional economic development
policies
- Easy interdependency of the industries.

External economies affecting the agglomeration- Localization economies is the location of

manufacturing industry close to the raw materials or the consumers locating close to the suppliers and
urbanization economies is a cost saving approach when industries choose to locate in large city due to
availability of goods and services, extensive knowledge spillovers and large labor supply

ADVANTAGES OF INDUSTRIES

1. Economic growth – prospering industrial environment is good for the country because
government get income in the form of taxes from the industries which in turn is used by the
government for various development projects,
2. It makes the country independent because once the country start producing goods with the help
of industrialization it does not have to depend on other countries for its demand and it can save
money by reducing the imports.
3. Presence of industries allows the availability of more products like TVs, cloths, furniture,
automobiles, food products.
4. Employment opportunities- more people are employed and this improves their living standards
and reduces the dependency ratio.

DISADVANTAGES OF INDUSTRIES
1. Pollution – it is the main disadvantage of industries, they promote various forms of pollution
such as air (they emit poisonous gases), land (dispose waste products on the land), noise
(excessive noise from the machine) and water pollution (disposal of liquid waste into the
streams)
2. Urbanization- since industries attract more people it leads to problems of urbanization
where more people move from rural areas to urban areas creating problems such as traffic
congestion, pressure on social services and natural resources
3. Contributes to food shortages – since more people leave the rural farm work and choose to
work in the industries
4. Social problems – it may lead to separation of families, increased crime and healthy of the
workers is affected by some industrial operations

Case study ; An industrial zone

BANGALORE (high-tech city)

Bangalore is a mega-city which is in India found on the deccan plateau and over the years a lot
of people or investors have been going to this area to establish their companies. A lot of
companies have been attracted to this area due to;
- physical factor that has attracted a lot of people or investments in this area is the presence of
moderate climate which ensures that the city is clean and free from dust
- the availability of cheap labour. This ensures that work is done at cheaper cost thereby
maximizing profits.
- presence of English speaking people in this makes it easy for the foreign investors to assimilate
to the area, there are over 80 million English speaking indians.
- a number of developed countries have significant ICT skills shortages
The coming of high technology industries has attracted the population boom in this country. the
city has grown into a major international hub for ICT companies. Bangalore has been nicknamed
silicon valley in india. Apart from ICT companies, it is also a hub of aerospace and biotechnology
industries. Bangalore has steadily build up high skilled labour that can undertake a wide range of
 tasks in biotechnology industries. There has been a wide range of infrastructural developments
to accommodate the high rate of expansion. It has become the fourth largest technology cluster
in the world after silicon valley, boston and London. The number of ICT companies increased
from 13 in 1991 to 2200 in 2013. 80% of the global ICT companies have based their operations in
Bangalore. Major companies include, hewlet Packard, siemens, Tata group of companies

EXERCISE