Primary Industry

Industrial Classification

Industry can be defined as‘ any economic activity which is performed for profit‘’. This is an all-encompassing term and it is usual to classify industrial activity into four main categories:

Primary Industry

Those which extract or collect raw materials directly from the earth or sea and do not involve any processing. Examples are mining, quarrying, farming and forestry.

This type of activity always takes place at the source of the raw materials.

Secondary Industry

Involves the transformation of raw materials or components into consumable products. They include manufacturing, processing and assembly activity. All industries in this sector add value to the raw materials they process, and their locations are vary.

Tertiary Industry

Tertiary industries are concerned with providing a service to customers , rather than with raw materials or finished goods. They are usually located near to the market they serve. Examples include transport, retailing, medical and other professional services.

Quaternary Industry

Quaternary industries include such things as universities and research and development establishments. Their main output is information and expertise. Since such outputs can be transmitted electronically, these industries can, in theory, be located almost anywhere. (footloose)

The proportion employed within each sector varies over time and can be

used as a measure of the development of a country.

Industry can be considered as a system in much the same way as

agriculture. Experts now recognise that industries, especially those in

the secondary, tertiary and quaternary sectors, consists of inputs,

processes and outputs. Profits can be made through processing and used

to pay for interest on borrowed capital, raw materials, rent, energy

consumption, wages and future development and expansion. The ties

between the raw materials, manufactured products and services are called industrial linkages.

Industrial Linkages

For example:

An area has rising unemployment due to the decline of its traditional industries and needs new jobs to stop a general decline in the area. The government attracts a car company to the area with the help of regional development aid. A factory will have been built for the company, and they will get removal grants, machinery grants, training grants etc.

The car company does not make all the components for its cars itself and looks to local suppliers to provide certain parts and services. Several companies that make parts such as windscreens, instruments, tyres, engine parts etc, decide to locate beside the car factory to be close to their market. This is an example of agglomeration and occurs in the Midlands.

However, this practice is also a gamble, and in certain cases the supply companies will not take the bait because the area is too remote from its other markets, or the volume of car production does not make it worthwhile.

Companies with greater industrial development have greater industrial linkages in a more complex network. These also tend to be located in developed countries. The limited number of industries in developing countries restricts the number of industrial linkages.

AGGLOMERATION – where one company attracts others of similar type or others that use their by-products. This has several advantages in terms of the financial savings to be made by locating in close proximity to and linking with other industries.

MYRDAL’S MULTIPLIER MODEL

The agglomeration principle can be examined in the case of an introduction of a new industry to an area. If it becomes economically successful it may generate a multiplier effect.

MYRDAL’S MULTIPLIER MODEL

INTRODUCTION OF A

NEW INDUSTRY TO AN AREA

MORE JOBS CREATED –

CONSTRUCTION & INFRASTRUCTURE

SPENDING POWER INCREASES

DEMAND FOR SERVICES INCREASES

INCREASED CONSTRUCTION &

MORE JOBS

POPULATION INCREASES

EVEN MORE SPENDING POWER

EXPANSION OF PUBLIC SERVICES &

TERTIARY SECTOR

ANOTHER INDUSTRY IS ATTRACTED

TO THE AREA

FACTORS WHICH AFFECT THE LOCATION OF INDUSTRY

The location of an industry depends on the interaction of several different factors. Each of these factors can influence to a greater or lesser extent where a particular industry may be sited.

Location factors can be physical or human:

Physical factors: (more important in the location of older industries)

RAW MATERIALS – Some industries have to be located at the source of these materials as is the case with extractive industries. Others may have to be located very close to them so as to reduce the cost and difficulties of transport. Many older industries had to locate near their raw materials. Older steelworks were located on coalfields and where iron ore was available. Modern steelworks such as Port Talbot in South Wales are built at the coast where the heavy raw materials can be imported.

Most modern industries are, however, footloose, because, they use fewer raw materials, raw materials are lighter (plastic or aluminium) and transport is more efficient and relatively cheaper.

POWER SUPPLY – In the past power was supplied by wither water or steam. The need for such water (to drive machinery) or coal or wood (to create heat for steam), often meant that industries had to be very close to one or both of these sources. River sites or coalfield sites were often considered to be the best places to establish heavy industry. Today, with supplies of electricity from the national grid, industry is no longer tied to energy sources.

SUITABLE LAND/SITE – Usually a good site will have flat, low land with plenty of adjacent space for future expansion. Greenfield sites on the edge of towns and cities provide this, but Brownfield sites in inner city areas have limited space for expansion.

NATURAL ROUTES – River valley locations were often essential for early industries for transport, waterpower and water supply.

Human factors: (more important in the location of modern industries)

LABOUR SUPPLY – In the 19th Century industries were labour intensive, the workers were unskilled, and low-paid industries located in the inner city areas beside high density housing. Workers had very little means of transport and could therefore walk to work. Modern industries have to consider whether labour is available and, more importantly whether labour with appropriate skills is available. Often industries locate in areas of industrial decline where there is a large unemployed workforce. Companies may locate near a university where graduates may be easily recruited and research and development work may be carries out.

TRANSPORT – Access to industries is necessary both for obtaining raw materials and for transporting the finished product to the eventual market place. Good access may be provided by road, rail, water or air. The type of transport required depends very much on the type of product being moved.

Before the 20th century heavy industries tended to locate near canals, rivers or at the coast because raw materials and finished products were bulky and transport costs were high. Today transport costs are much lower due to greater efficiency and companies can sell to more distant markets therefore a cheap transport location is not necessarily an important location factor.

MARKET – Industries that produce perishable (fresh) goods such as food, are found near their local markets. Industries that make a bulky product, such as a brewery, are also located in or near towns and cities. If the market is global it is more important to be near good transport links.

GOVERNMENT AND EU POLICY – Governments can attract industries to areas by offering a range of grants, subsidies, rent-free accommodation and other financial incentives to major industrial companies. Through its regional aid schemes the EU can offer a wide variety of incentives to help to improve the economy of areas that have problems such as areas of high unemployment, industrial decline and slow economic growth. Government and EU incentives include: tax allowances, grants for factory construction or ready built factories, rent free periods, worker training schemes and exemption from rates.

Urban development corporations have been set up to attract new industry to inner city areas. This includes improving the housing, services, transport links and the environment. For example, Glasgow’s GEAR scheme (Glasgow Eastern Area Renewal).

ENVIRONMENT – In the past little thought was given to the environment in which people worked. Today, industries, which use highly skilled workers who are in short supply, must locate in attractive areas if they are to get the employees they need e.g. rural greenbelt areas.

LINKAGES – Many industries now prefer to locate near to others of the same type. This is because they know there will be skilled labour available, support services and they can share component suppliers.

INDUSTRIAL INERTIA – Inertia is a term used to describe the situation whereby an industry will continue to operate in an area although the original location factors may no longer be a major influence. This will happen because it is too costly to close the industry and move it elsewhere.

CAPITAL – Investment now comes from banks and shareholders, rather than wealthy entrepreneurs (businessmen or women investing large sums). Companies can now lease factory space without the need to be able to afford the property.

FACTORS WHICH AFFECT THE LOCATION OF INDUSTRY

The location of an industry depends on the interaction of several different factors. Each of these factors can influence to a greater or lesser extent where a particular industry may be sited.

Location factors can be physical or human:

Physical factors: (more important in the location of older industries)

RAW MATERIALS – Some industries have to be located at the source of these materials as is the case with extractive industries. Others may have to be located very close to them so as to reduce the cost and difficulties of transport. Many older industries had to locate near their raw materials. Older steelworks were located on coalfields and where iron ore was available. Modern steelworks such as Port Talbot in South Wales are built at the coast where the heavy raw materials can be imported.

Most modern industries are, however, footloose, because, they use fewer raw materials, raw materials are lighter (plastic or aluminium) and transport is more efficient and relatively cheaper.

POWER SUPPLY – In the past power was supplied by wither water or steam. The need for such water (to drive machinery) or coal or wood (to create heat for steam), often meant that industries had to be very close to one or both of these sources. River sites or coalfield sites were often considered to be the best places to establish heavy industry. Today, with supplies of electricity from the national grid, industry is no longer tied to energy sources.

SUITABLE LAND/SITE – Usually a good site will have flat, low land with plenty of adjacent space for future expansion. Greenfield sites on the edge of towns and cities provide this, but Brownfield sites in inner city areas have limited space for expansion.

NATURAL ROUTES – River valley locations were often essential for early industries for transport, waterpower and water supply.

Human factors: (more important in the location of modern industries)

LABOUR SUPPLY – In the 19th Century industries were labour intensive, the workers were unskilled, and low-paid industries located in the inner city areas beside high density housing. Workers had very little means of transport and could therefore walk to work. Modern industries have to consider whether labour is available and, more importantly whether labour with appropriate skills is available. Often industries locate in areas of industrial decline where there is a large unemployed workforce. Companies may locate near a university where graduates may be easily recruited and research and development work may be carries out.

TRANSPORT – Access to industries is necessary both for obtaining raw materials and for transporting the finished product to the eventual market place. Good access may be provided by road, rail, water or air. The type of transport required depends very much on the type of product being moved.

MARKET – Industries that produce perishable (fresh) goods such as food, are found near their local markets. Industries that make a bulky product, such as a brewery, are also located in or near towns and cities. If the market is global it is more important to be near good transport links.

GOVERNMENT AND EU POLICY – Governments can attract industries to areas by offering a range of grants, subsidies, rent-free accommodation and other financial incentives to major industrial companies. Through its regional aid schemes the EU can offer a wide variety of incentives to help to improve the economy of areas that have problems such as areas of high unemployment, industrial decline and slow economic growth. Government and EU incentives include: tax allowances, grants for factory construction or ready built factories, rent free periods, worker training schemes and exemption from rates.

ENVIRONMENT – In the past little thought was given to the environment in which people worked. Today, industries, which use highly skilled workers who are in short supply, must locate in attractive areas if they are to get the employees they need e.g. rural greenbelt areas.

LINKAGES – Many industries now prefer to locate near to others of the same type. This is because they know there will be skilled labour available, support services and they can share component suppliers.

INDUSTRIAL INERTIA – Inertia is a term used to describe the situation whereby an industry will continue to operate in an area although the original location factors may no longer be a major influence. This will happen because it is too costly to close the industry and move it elsewhere.

CAPITAL – Investment now comes from banks and shareholders, rather than wealthy entrepreneurs (businessmen or women investing large sums). Companies can now lease factory space without the need to be able to afford the property.

Industrial Development and how it affects employment structures

The industrial development of any country or area can be recognised as a series of phases from agrarian-based industry to the post-industrial phase. This dictates that there will be changes in the percentage employed in each sector over time.

As a country develops its industrial system will become more complex. With the increase in manufacturing industry the number of wage earners increases, so there will be more money in the economy. As the proportion of a family’s wage packet needed to pay for essentials, such as food, clothing, housing, energy etc , decreases so will there be more money available to spend on non-essential services and luxury items. The level of a country’s development can sometimes be looked at in terms of the percentage of its population employed in the different sectors of industry.

Phase 1 Earliest industry

Small scale and used manual power, for example spinning and weaving cloth and was carried out in individual homes. (Domestic system)
Water power was used to grind grain in small mills.
Most people worked on the land farming, quarrying or fishing. (Primary sector) Some manufacturing (secondary sector) took place anywhere there were clusters of population in villages and small towns, making use of local raw materials at a time when transport was difficult due to lack of roads.

Phase 2 Industrial Revolution

When industry became less dispersed with the development of the factory system, and the construction of large textile mills using water-power.
Riverside locations were still vital, but industry was still dispersed in river basins, and in rural, rather than urban , locations.
Markets expanded and roads and canals were the transport systems used to get goods to the market.
Production in the textile mills was still labour-intensive. There was thus a marked switch of labour from the primary to the secondary (manufacturing) sector.

Phase 3 Large-scale exploitation of the coal fields in the 19th century and steam power

Steam power was dependent on coal. Factories and ironworks being built and new industrial towns and villages growing up in close proximity.
Industry became concentrated in these new urban areas where the raw materials were easily extracted.

New technology eg the steam engine and the pump aided industrial expansion.

Large increase in jobs in the secondary sector but also coal mining jobs (primary sector).

Heavy industry (coal mining, manufacturing iron and steel and chemicals, heavy engineering and shipbuilding) became concentrated on the coalfields or at the ports on their edges.

Old industrial landscape developed with a negative impact on the environment.

Fourth stage came in the second half of the 20th century