Advantages and Disadvantages of Localisation of Industries

Read this article to learn about various Advantages and Disadvantages of Localisation of Industries!

Advantage of Localization of Industries:

There are several benefits which an industry derives from becoming localised in a certain place.

These advantages may be summarized as follows:

(i) Labour gets trained. Dexterity and skill are handed down from one generation of labourers to the next. A large body of trained labour is built up.

(ii) A large market for a certain type of labour is developed in the locality. Labour of this type can migrate to that locality with almost a sure guarantee of employment. Employers in search of labour of this type can also find it there.

(iii) Financial facilities grow up. Banks are started there. The industry enjoys the benefit of cheap credit facilities.

(iv) Suitable means of communication and transport get developed. This is a great advantage to the localised industry.

(v) There is a stimulus for the starting of subsidiary or supplementary industries, thus providing a wider range of employment for labour and capital. The by-products are put to economical uses.

(vi) The reputation of a locality for particular goods widens the market. Orders flow in from distant places. The market is thus assured. The industry can have a steady growth.

(vii) Technical journals come to be published. Training and research institutes are established from which the industrialists benefit a great deal.

(viii) It brings prosperity to the locality. It provides employment and adds to the income of the people.

(ix) Collective action is rendered possible. The industrialists organise themselves in associations to safeguard their common interests, and so do the labourers.

(x) Several improvements are made in the industry, because there is opportunity for exchange of ideas. There is healthy rivalry. All this is beneficial for the industry.

Disadvantages of Localizations of Industries:

Localization of industries is not an unmixed blessing. Several evils are associated with it.

They are:

i. Dependence on the main industry is risky. A depression in that industry is bound to spell disaster to the whole locality. It is not wise to place all one’s eggs in one basket.

ii. Scope of employment is restricted. Employment is available for one type of labour only. In a centre, where there is a greater variety of employment, the entire family of a worker may find employment. But here only a few of them will get work so that the total family earnings remain low.

iii. Over-specialisation leads to dependence on other centres which proves very dangerous in times of war. We may not be able to import the necessary materials and machinery. Dependence on foreign markets for the disposal of goods is also risky.

iv. The dishonesty of a few manufacturers brings into disrepute all the rest. The products of the locality get a bad name, and even honest manu­facturers suffer.

v. Labour tends to lose its mobility for obvious reasons. They have to be content to remain where they are. There are few other openings in the locality.

It leads to over-congestion. This seriously tells upon the health and efficiency of workers and their children. This is what has happened in Bombay, Calcutta, Kanpur, etc.

vi. Risk of bombing. Bombing during a war may paralyse the industry. Hence there is a lack of security. The big industrial cities are the usual targets of the enemy attack.