B.6. Non-Geographical Factors
- Capital investment.
- Availability of loans.
- Investment climate.
- Government policies/regulations.
- Influence of pressure groups.
i. Explanation
- Capital or huge investment is needed for the establishment of industries.
- Government policies are another factor that influences industrial location. The government sets certain restrictions in the allocation of land for industries to reduce regional disparities, control excessive pollution, and avoid the excessive clustering of industries in big cities.
- Industrial inertia is the predisposition of industries or companies to avoid relocating facilities even in the face of changing economic circumstances that would otherwise induce them to leave. Often the costs associated with relocating fixed capital assets and labor far outweigh the costs of adapting to the changing conditions of an existing location.
- Efficient and enterprising organization and management are essential for running the modem industry successfully.
- The location that has better banking facilities and Insurance are best suited for the establishment of industries.
It is rarely possible to find all these factors available in one place. Consequently, manufacturing activity tends to be located at the most appropriate place where all the factors of industrial location are either available or can be arranged at a lower cost.
In general, it should also be noted that both lower production cost and lower distribution cost are the two major factors when considering the location of an industry. Sometimes, the government provides incentives like subsidized power, lower transport costs, and other infrastructure so that industries may be located in backward areas.