Location of economic sectors

What factors influence the location of economic sectors?

Factors influencing the location of economic sectors

• Every type of economic activity has a particular location

• The location is affected by both physical and human factors

• These factors relate to the needs of the economic activity

• Physical factors include:

  • Raw materials: industries require raw materials to produce goods

  • Land: how much land costs and how much is available  

  • Energy: where the industries get their power supply from

  • Climate: some industries benefit from particular climates

• Human factors include:

  • Capital: the money that is available to set up and run the economic activity

  • Transport and communications—accessibility by road, air and rail is important to many industries

  • Market: how close the industries are to the market

  • Labour: all industries need workers

  • Government policy: tax incentives, cheaper rent

What are the factors that affect the location of the primary sector?

Factors affecting primary activity location

• Primary economic activities include agriculture, mining, forestry and fishing

  • Distance from the market and cost of transport are particularly important for mining due to the bulky products 

  • Climate would be more important for agriculture 

• Climate - precipitation, sunshine hours and temperature all affect the type of crops grown or livestock

• Land - The amount of land available, cost, soil type and resources (coal, gold)

• Market - Some crops need to be very close to the market, such as soft fruits (strawberries)

• Government policies - Whether subsidies - money paid by the government to ensure that producers get a fair price for their product - are available

• Labour - In developed countries, there are few workers needed due to mechanisation

• Transport - Access to roads to transport crops, animals, quarried/mined materials, timber

What are the factors that affect the location of the secondary sector?

Factors affecting secondary activity location

• Secondary economic activities involve car manufacturing, food processing, and shipbuilding.

• The importance of the location factors depends on:

  • The weight of raw materials and the finished product as heavier, bulky products cost more to transport

  • The size of the factory required for car manufacture needs much more space than food processing or clothing production

• Raw materials - How close the activity needs to be to raw materials and the types of raw materials will depend on the industry

  • Industries needing heavy or bulky raw materials will be located near the raw materials

• Land - Large areas of land are often required for factories, so the cost and amount of the land are important

• Water - a nearby water supply may be needed for industrial processes

• Market - Access to the market is important to be able to sell the goods made

• Government policies - Tax incentives, grants, and loans may be available if the economic activity is located in a particular area

• Energy - A power source is needed; this used to be coal or water

  • During the Industrial Revolution, this meant that factories were located near coal fields

  • Energy is now provided by electricity, which can be accessed in many areas

  • In developing/emerging countries where energy infrastructure is poorer, factories are located near energy sources

• Labour - Mechanisation means that not as many workers are required

• Transport - Access to roads is essential to bring in raw materials and send out the product

  • Factories may also be located near to ports

What are the factors that affect the location of the tertiary sector?

Factors affecting tertiary activity location

• Tertiary economic activities involve providing a service such as healthcare or retail. The most important factor for location is usually:

  • Proximity to the customers 

• Land - The amount of land depends on the type of economic activity; large retail parks need lots of land 

• Market - Needs to be close to the customers or service users

• Energy - A power source is needed—electricity, which can be accessed in many areas

• Labour - Workers needed both skilled and unskilled

• Transport - It needs to be accessible for customers, workers and in the case of retail, to bring in the products

What are the factors that affect the location of the quaternary sector?

Factors affecting quaternary activity location

• Quaternary economic activities involve high technology, such as research and development. The most important factors in their location:

  • Proximity to skilled workers and universities 

  • Pleasant working environment

• Land -Science parks - an area, often near a university, where high-tech and research and development companies are located - need large areas of land, usually near a university on the rural-urban fringe

• Energy - A power source is needed—electricity, which can be accessed in many areas

• Labour - Skilled labour is needed, often university graduates

• Transport - Needs to be accessible to the workers

How does the location of the primary sector change over time?

Primary activities

• The location of primary activities may be affected by several factors:

  • Drought, soil erosion, flooding and other events may lead to decreased growth of crops/raising of livestock

  • Raw materials may run out in an area or become economically unviable - when the cost of growing / obtaining the raw material costs more than it sells for

  • Climate change may affect the types of crops which can be grown 

How does the location of the secondary sector change over time?

Secondary activities

• The location of manufacturing activities or secondary economic activities has changed significantly:

  • Transport is faster and cheaper, which means products can be moved around the world 

  • An increase in transnational corporations (TNCs) with factories and offices in many countries

  • Factories were once tied to a power source of coal supplies or water

    • Electricity is now available almost anywhere

  • The internet means instant communication with factories and offices around the world is possible

  • Government policies in emerging and developing countries are aimed at attracting manufacturing, often using tax incentives

  • Cheaper labour, less strict health and safety, cheaper land and more workers are all available in developing and emerging countries

    • These reduce costs and increase profits

  • Raw materials may no longer be available in the area 

• These changes have led to a reduction in secondary economic activities in developed countries such as the UK

  • This is known as deindustrialization

How does the location of the tertiary sector change over time?

Tertiary activities

• The location of tertiary and quaternary economic activities is increasingly located in rural (greenfield - areas of land which have not been built on before) areas on the rural-urban fringe due to several factors:

  • There is more open space for expansion and car parking

  • Land is cheaper

  • More accessible 

  • Located near the suburbs and commuter village (rural settlements where people live and then travel elsewhere to work), good access for workers and customers

  • Increase in science parks, business parks and retail parks where similar businesses are located together

• This process is known as decentralisation - the movement of economic activities from the city centres and inner cities to the rural-urban fringe

How does the location of the quaternary sector change over time?

Quaternary activities

• The location of quaternary activities is often on the rural-urban fringe on greenfield sites, near universities or other quaternary businesses

• The activities are often focused on regions as a result of government investment in a particular area

• Improvements in infrastructure, particularly communication make areas attractive to quaternary activities