Geography Chapter 1: Factors Affecting Location of Industries

Industry classification: Primary (extraction of raw materials), Secondary (manufacturing of raw materials into products), and Tertiary (providing services to people)
Manufacturing: The process of turning raw materials into semi-finished or finished goods, involving input, output, and process
Manufacturing Industries: Classified into Light Industry (e.g., clock and watch, electronics, textile) and Heavy Industry (e.g., shipbuilding, car-making, iron and steel)
Terms:
- Heavy Industry: uses heavy materials, produces heavy products
- Light Industry: uses light materials, produces light products
- Labour-Intensive: requires much labour
- Capital-Intensive: requires much capital
- Low-Technology: little investment in R&D, traditional ways of production
- High-Technology: much investment in R&D, advanced technology used
- Agglomeration: benefits of industries locating near each other
- Industrial Inertia: tendency to stay in one location despite better alternatives

Land: needs a lot of land for storage and production, low cost and large land reduce production costs
Raw Materials: proximity to raw materials reduces production costs
Power: consumes a lot of energy, inexpensive power supply reduces production costs
Labour: some industries need professionals, abundant cheap labour reduces production costs
Market: finished products are bulky, fragile, or perishable, weight of finished product > Raw Material -> Weight-gain industry
Transport: transport cost increases with distance from market, efficient transport system -> low cost, factories prefer locating near railway/sea facilities
Technology:
- Transport Development: reduces transport costs, no need to locate near raw materials
- Machinery: reduces demand for labour, increases efficiency for labour
- New Technology in Food Preservation: reduces tendency to locate near urban centres, reduces land rental costs
- Telecommunications on Internet: promotes faster flow of information, encourages globalisation
Agglomeration: benefits of industries locating near each other, increases labour supply, reduces transport costs, and availability of supporting services and infrastructure
Historical Factors: industrial inertia, too large and expensive to move
Government Policies: tax benefits, low rent, better infrastructure, favourable population policy, less stringent pollution controls
Human Desires: personal preference, non-economic goals

Definition of IT Industry: high-tech industry, produces computer and telecommunication-related products and services, involves a wide range of industries
Characteristics of IT Industry: Research and Development-intensive, Capital-intensive, Short product life cycle
Stages of IT Production:
- Stage I: Inputs (capital, technology, high-tech equipment, skilled and unskilled labour, raw materials, power)
- Stage II: Processes (R&D, design, manufacturing, assembly, packaging)
- Stage III: Outputs (IT products)
- Stage IV: Market
- Stage V: Income
Why is R&D Costly?: companies spend a lot on high-tech laboratories, high-tech equipment, professional labour, and it takes a long time to reach a technological breakthrough
USA IT Industry:
- Location: dispersed pattern, suburban areas of metropolis
- Silicon Valley: located in the Southern part of San Francisco Bay, specialises in R&D, contributes to economic growth
Factors favouring the growth of IT Industry in Silicon Valley:
- Strong industry-university interactions
- Labour: abundant supply of well-educated labour
- Capital: abundant capital from venture capitalists
- Economies of agglomeration: good reputation, reduce ads cost, well-developed infrastructure and transport, availability of ancillary services
- Market: growing local and overseas market -> profit
- Good living environment: low building height, low building density, large green areas, good air quality

Impacts of Factories Moving In:
- Urban and economic growth
- Transfer of technology and knowledge
- Labour exploitation: low wages, long working hours, child labour, no social security or labour unions
- Air pollution: burning of fossil fuels, air pollutants, lower air quality, smog, acid rain
- Water pollution: discharge of sewage and cooling water, toxic substances, harm to aquatic ecosystems
- Solid waste: many products become outdated, generating solid waste, containing toxic substances
Impacts of Factories Moving Out:
- Urban decay: job opportunities decrease, many people are unemployed, economy declines, government revenue decreases, quality of infrastructure decreases
- Changes in employment structure: factory workers become unemployed, some workers shift to work in the tertiary sector, employment structure changes
- Less air pollution: air quality improves, acid rain occurs less severely and less often
- More water pollution: toxic chemicals and heavy metals can accumulate in sediments in water bodies for years, threatening wildlife and human health

Socio-economic Aspect:
- Retraining of labour: to increase competitiveness of unemployed workers, acquire new skills
- Improve social security systems: to help the unemployed maintain a minimum standard of living
Measures to alleviate impacts:
- In old industrial areas: retraining of labour, improve social security systems
- In new industrial areas: improve infrastructure, develop related services and industries, attract more professionals### Government Policies to Reduce Unemployment
Increase government expenditure to provide training and retraining programs to enhance computer skills
Comprehensive Social Security Assistance (CCSA Scheme) and Unemployment Assistance Scheme provide financial support
Continuing Education Fund: HKD 25,000 for individuals above 18 years old

Provides more job opportunities and diversifies the economy
Examples: Tourism, hospitality, and retail industries that do not require high education background
Limitations: Need training and must be accompanied by other measures

Prevents labour exploitation and sets minimum wage and maximum working hours
Limitations: Legislation takes a long time to enact and employers may oppose laws to increased production costs

Sets up laws to prosecute factories that exceed emission limits or discharge sewage illegally
Limitation: Costly in time and money
Examples: Monitoring chemicals used by factories and Carbon Tax

Focuses on product development, production, and post-production stages, including collection and recycling of old products
Advantages: Uses less material, reduces energy use, makes products more durable, and saves money in waste management
Limitation: Increases investments