Industry » Types of industry and industrial location factors

What you'll learn this session

Study time: 30 minutes

The different types of industry (primary, secondary, tertiary, quaternary)
Key factors that influence industrial location
How these factors vary for different types of industry
Case studies of industrial location decisions
Changes in industrial location patterns over time

Types of Industry

Industries can be classified into different sectors based on the type of activity they perform. Understanding these sectors helps us analyse how economies develop and change over time.

Key Definitions:

Industry: Economic activity concerned with the processing of raw materials and manufacture of goods or provision of services.
Industrial location: The geographical place where an industry chooses to establish itself.
Location factors: The various considerations that influence where an industry decides to locate.

🏥 Primary Industry

These industries extract or harvest products directly from the earth. They form the base of the industrial chain.

Mining and quarrying (coal, oil, minerals)
Agriculture (farming, fishing)
Forestry (timber production)

Location factors: Availability of natural resources, climate, soil quality, access to water

🏭 Secondary Industry

These industries process raw materials from primary industries into manufactured goods.

Manufacturing (cars, electronics, textiles)
Construction (buildings, infrastructure)
Energy production (power stations)

Location factors: Access to raw materials, transport links, labour supply, energy sources, market access

💼 Tertiary Industry

These industries provide services rather than producing physical goods.

Retail and wholesale
Transport and communications
Healthcare and education
Tourism and hospitality

Location factors: Market size, consumer spending power, infrastructure, skilled workforce

💻 Quaternary Industry

These are knowledge-based industries focused on research, technology and information.

Research and development
Information technology
Financial services
Consultancy

Location factors: Highly skilled workforce, university links, quality of life, telecommunications infrastructure

Industrial Location Factors

Industries choose their locations based on a range of factors. The importance of each factor varies depending on the type of industry and has changed over time.

💰 Economic Factors

Land costs and availability
Labour costs and skills
Proximity to markets
Transport costs
Government incentives

🌎 Physical Factors

Raw material availability
Energy sources
Flat land for building
Water supply
Climate conditions

🏢 Social Factors

Quality of life for workers
Educational facilities
Housing availability
Cultural amenities
Environmental regulations

How Location Factors Vary by Industry Type

Traditional Manufacturing Industries

Heavy industries like steel production or shipbuilding have historically been influenced by:

Raw materials: Located near coal mines, iron ore deposits or ports
Transport: Need good connections for bulky raw materials
Energy: High energy requirements made proximity to power sources important
Labour: Access to large workforce

Example: The steel industry in South Wales developed near coal fields and ports for importing iron ore.

Modern High-Tech Industries

Industries like electronics or pharmaceuticals are influenced by:

Skilled workforce: Access to university graduates and researchers
Research facilities: Proximity to universities and research centres
Quality environment: Pleasant locations to attract skilled workers
Transport links: Good international connections
Telecommunications: High-speed internet and digital infrastructure

Example: Silicon Valley in California developed around Stanford University and attracts tech companies due to its concentration of skilled workers and venture capital.

Case Study: Toyota in Derby, UK

Toyota chose Derby for its UK manufacturing plant in 1989 due to several key factors:

Central location with good transport links (M1 motorway, rail connections)
Available workforce with manufacturing skills from existing engineering industries
Government grants and incentives to locate in the area
Proximity to suppliers in the Midlands automotive industry
Large, flat site available for development
Access to the European market (at the time of construction)

The plant now employs around 3,000 people and produces over 180,000 vehicles per year.

Changes in Industrial Location Patterns

Industrial location patterns have changed significantly over time due to technological advances, globalisation and changing economic priorities.

📅 Historical Patterns

In the past, industries were heavily tied to:

Physical resources (coal, iron ore, water power)
Transport nodes (ports, railway junctions)
Local markets

This created distinct industrial regions like the Ruhr Valley in Germany, the North of England and America's "Rust Belt".

🚀 Modern Trends

Today's location decisions are increasingly influenced by:

Globalisation and international trade
Digital connectivity
Lower transport costs
Environmental regulations
Quality of life factors

This has led to the growth of business parks, science parks and industrial clusters in previously non-industrial areas.

Case Study: Deindustrialisation and Reinvention in Manchester, UK

Manchester was once a major textile manufacturing centre known as "Cottonopolis". The city's industrial base declined dramatically in the mid-20th century due to:

Competition from overseas manufacturers with lower labour costs
Outdated factories and technology
Changing global trade patterns

Since the 1990s, Manchester has reinvented itself by:

Developing a service-based economy (finance, retail, education)
Creating a digital and creative industries hub (MediaCityUK)
Investing in transport infrastructure
Repurposing former industrial buildings for new uses
Leveraging its universities to attract knowledge-based industries

This transformation shows how industrial location factors have shifted from physical resources to knowledge, connectivity and quality of life.

Summary: Key Location Factors by Industry Type

Industry Type	Most Important Location Factors	Example
Primary	Natural resources, climate, land availability	Mining companies locate near mineral deposits
Secondary (Heavy)	Raw materials, transport, energy, labour supply	Steel works traditionally located near coal fields
Secondary (Light)	Transport links, market access, labour costs	Clothing factories often located in areas with lower wages
Tertiary	Market size, population density, infrastructure	Shopping centres located in areas with high footfall
Quaternary	Skilled workforce, university links, quality of life	Tech companies clustering in innovation hubs like Cambridge

Understanding industrial location factors helps us explain why industries are distributed as they are across the world and how these patterns might change in the future as economies develop and new technologies emerge.