THE RISE OF MANUFACTURING INDUSTRY

Man’s universal demand for food, clothing, shelter and other comforts of life has prompted the creation of many new things. Foods are preserved or canned to last longer. Modern homes have telephones, television sets, refrigerators, washing machines and other luxuries. Few people ever realize that all these changes have come about only within the last 200 years, beginning with the Industrial Revolution of the eighteenth century. Two great developments, the burning of coal for steam power and the smelting of iron to make steel, have ushered in a new phase in human history, the age of science and technology. A host of raw materials such as cotton, timber, rubber, copper, bauxite and limestone can be converted into manufactured goods of great utility like shirts, paper, tyres, copper wire, aluminium and cement. The work of domestic craftmen has been taken over by highly complicated machines. Village workshops have been forced out of business and in their place factories have been established. The manufacturing industries penetrate supply into our lives.

The industrial growth is greatest in Western Europe and North America. It is spreading fast into other countries and to the less-developed countries. The increase in the population of industrial workers and the greater productivity of each worker have increased the annual output of manufactured products many times. Through greater automation and standardized mass-production, industrial expansion seems likely to go on and on.

 

Groups of Industries

The range and complexity of modern manufacturing industries are so great that it is by no means easy to classify them but most of them fall into the following seven groups.

1. Fuel and power industry: This branch of industry deals entirely with the generation, extraction or refining of the various sources of power: steam power (mainly from coal), hydroelectricity (from falling water), thermal electricity (from burning other fuels), petrol and oil (from the refining of petroleum. In addition to these are natural gas and nuclear power.
2. Mineral extracting industry: This includes the concentration, smelting and alloying of minerals and the smelting of non-ferrous metals, e.g. copper, tin, aluminum, lead, zinc and their alloyed metals such as brass and bronze; also that of ferrous metals, e.g. iron, manganese, chromium, nickel, tungsten, cobalt, vanadium, molybdenum and others.
3. Metallurgical industry: This section refers to machinery, instruments, equipment and tools that are manufactured from metals. It includes iron and steel works, mechanical engineering, electrical engineering, shipbuilding, locomotives, automobiles, aircraft and cutlery.
4. Chemicals industry: This is the production and development of a chain of scientifically devised materials of a highly specialized nature and is encroaching on almost every branch of industry. Some of the most important products of this branch of industry include: acids, alkalis, gases, dye-stuffs, soap, paints, varnishes, solvents, detergents, fertilizers, insecticides, pharmaceuticals (drugs and medicines), glass, plastics, paper and pulp, synthetic fibres and synthetic oils.
5. Textiles: This is one of the oldest and the most widespread industries. It is the spinning and weaving of textile materials from cotton, wool, flax (linen), silk, jute, hemp and hairs. The existing textile centres have also developed artificial fibres from synthetic or nitrogenous materials, e.g. rayon, nylon, dacron, teteron, terylene, perlon.
6. Food processing industry: This is the preparation of foodstuffs for human consumption from both animal and vegetative sources, and includes flour milling, oil milling, sugar refining, meat packing, brewing, confectionery, as well as the canning, bottling, preservation and preparation of a whole range of foodstuffs like fish, fruits, vegetables, beverages, spices, breakfast cereals and other products.
7. Other consumer goods industries: This branch loosely covers all the rest of the manufactured goods consumed or used by man. They include miscellaneous industries such as footwear, furniture, pottery and porcelain, printing, cement, toys, cosmetics, jewellery and other luxury goods.

 

Factors of Industrial Location

Many factors may play a role in deciding where industries should be located and it is never easy to pin-point them all. An industrialist who sets out to locate a site for his workshop will have to assess, to the best of his ability, the various forces that may influence his investment. Basically, the production factors, raw materials, power and human resources, merit his greatest attention. A good network of transport enables all the production factors to be assembled at his factory site at the lowest possible cost. But unless there is a demand for his goods, all the other advantages will serve no purpose. The location of the site in relation to the entire trading zone and, above all, the period of time when the enterprise was undertaken also affect industrial location. No single factor decides the location and the growth of an industry. The factors are complementary, reacting upon one another in a complex fashion. Very often the advantage of one factor is offset by the disadvantage of another. For instance, an abundant, cheap labour force may be offset by low output and inefficiency, or by high transport costs, or by inavailability of certain raw materials. It is never easy to secure an ideal site. The entrepreneur simply has to make the best use of whatever factors are at his disposal.

The following are the various factors that are normally considered in the location of an industry.

1) Raw materials: Raw materials are the basic requirements of any manufacturing industry. No factory can turn out goods unless it has the raw materials to begin with. They may be in the form of metals, ores, rocks, cereals, fibres, beverages or any other economic product. Before the development of an adequate system of roads, railways, waterways, sea and air routes, industries were very localized, depending to a great extent on the availability of local raw materials. The pencil-making industry of Keswick in the Lake District owed its existence to the availability of local graphite and timber. On a larger scale, the cotton textile industry of Mumbai was based, and is still dependent, on the supply of raw cotton from the Deccan cotton fields. The timber makes up less than 40 per cent of wood in a log, the rest being mainly waste.

Modern industries requires a wide variety of raw materials and not all of them are available on the spot: imports are necessary. For example, the iron and steel industry requires iron ore, coke and flux and ferro-alloys such as manganese, nickel and chromium. The Ruhr district of Germany has abundant coal and limestone (used for flux) but nowadays has little iron. It imports the iron from Sweden, and the other ferro-alloys from all over the world. It is not true to say that without local raw materials, industries will not prosper. Britain has no cotton yet she has been a leading exporter of cotton textiles since the nineteenth century.

 

2) Power or fuel: If you look at the world’s industrial areas, shown in Fig. 31.1, you will realize that the greatest concentration is around the major coalfields. This can be easily explained. As industries began with the Industrial Revolution, when coal was the only available fuel to generate steam-power to run the machinery, industrial sites had to be located at or near the coalfields. Furthermore, the fuel efficiency was extremely low at that time, requiring something like twelve tonnes of coal to smelt one tonne of iron ore. The pull of a coalfield as an industrial location factor was indisputable! In fact, almost all the major industrial areas of the world are based on coalfields, e.g. the Ruhr, Pittsburgh, Midlands, Donbas, Kuzbas, Jamshedpur, Sydney and others.

With the improvement made in fuel efficiency today, requiring only one tonne of coal to smelt one tonne of iron ore, it matters very little whether iron is brought to coalfields or coal to iron fields, but industry remains in the coalfield areas where it was first established.

Its great bulk, its higher transport cost and its lower energy output, have all contributed to the declining importance of coal as a fuel. But its use is still of economic significance. Coal is still burnt to power steam turbines, to generate thermal electricity or as a source of coke for smelting. Useful by-products from the coke ovens, e.g. gas, benzole, coal-tar for dyestuffs, ammonium sulphate for fertilizers and for manufacturing nylon are also important.

The most economical form of power is electricity both thermal and hydro. It is clean, efficient, and can be easily transmitted. Modern industrial plants are run by electricity, but because it is easily transmitted from place to place it is rarely a significant control over industrial location. In some cases, however, it is important. For instance, the siting of aluminium smelting plants relies to a large extent on the supply of cheap and abundant hydro-electric power as at Kinlochleven Scotland; Odda, Norway, Kitimat, British Columbia and Akosombo, Ghana.

Though petroleum is extensively used in industries as a form of power, it is seldom a factor of location. The Middle East, Venezuela and many other petroleum drilling areas have few manufacturing industries. There are, however, industries at the exporting ports or importing ports where the products of oil refining give rise to petro-chemical and allied industries.

Other sources of power such as natural gas, solar and nuclear power are used only in the very advanced nations. When their extraction and control is perfected on a commercial scale, they may be decisive factors in the location of future industrial areas.

 

3) Transport: The function of transport is to move raw materials to industrial sites and to convey the finished products to the consuming districts. Bulky goods like coal, iron, timber, grains and heavy machinery are most economically conveyed by waterways. Rivers and canals have long been regarded as a vital link between the ‘maker’ and the ‘user’ of consumer goods. The Rhine and its associated canal system serve the industrial districts of three European nations-Switzerland, Germany and the Netherlands. In North America, the St. Lawrence-Great Lakes waterway links the Atlantic with the interior. The two-way transport of coal and iron ore between the Pittsburgh district and the Lake Superior region enables the most advantageous load-coefficient to be attained. If you look at a world map, you will see that many of the major industrial regions have a coastal location, which facilitates the import and export of bulky goods by sea, e.g. Merseyside (Liverpool), Clydeside (Glasgow), Hamburg, Genoa,New York, San Francisco, Tokyo-Yokohama, Sydney and many others. Where expensive overland routes by road or rail add appreciably to the cost of production, as in the case of Switzerland, people tend to specialize in high-grade articles that are less bulky but fetch a higher price. The greater mobility of inland motor transport has resulted in the decentralization of many industries. Lack of an adequate network of communications has prevented large areas of the tropics from being developed.

 

4) Markets: Economic production is based entirely on demand. Unless there is a promise of reward in monetary terms, industrialists will hesitate to invest, no matter how good the location is. Industrial regions are therefore established near consuming areas, where there is a heavy concentration of people, even when raw materials and other factors are unfavourable. The densely populated regions of Western Europe and North America are thus important industrial areas as well. Their high per capita income creates great demand for consumer goods of any kind. But dense populations alone, without the necessary purchasing power, need not constitute a market at all. Countries like China, Indo-Pakistan and Indonesia, which are densely populated, do not have a proportionate amount of industrial development.

 

5) Human resources: This comprises the inventor, the manager and the worker. A successful industrial undertaking makes use of the various machines devised by scientists, technologists and inventors. Researcher are carried out all the time to improve the productivity and efficiency of the existing means of production. Human ingenuity and inventive resourcefulness have made it possible for highly complex plants to be machine-operated in almost any geographical environment. Without the technological skill of such people, industrial development could not have taken place.

Factories are run by people and the numbers needed are determined by the size of the factory. Three aspects of labour have to be considered, its availability, capability and reward. In the past, when machines were smaller and less complicated, a large number of factory hands were needed to operate them. Many stages in processing, e.g. sorting or packing, were done by hand. This required a large, cheap but relatively unskilled labour force. But conditions today are quite different. Large, sophisticated machines can be managed by only a few, skilled workers. More and more production stages are being mechanized. But this has not resulted in any decline of production. It has, on the contrary; increased the annual output. It is useful to remember that a cheap and abundant labour force is not always a locational advantage, unless the labour is also efficient. In the light industries, where little factory knowledge is preferred, semiskilled labourers are employed. Women are normally engaged in jobs that are repetitive in nature. In the field of highly specialized industries, such as diamond-cutting and the making of precision instruments, the skill and experience of workers are the most important factors. The Swiss are craftsmen whose inherited skill and aptitude for watch-making and other fields of engineering are outstanding. Such specialized industries are often very localized.

The availability of labour and technology is of little significance unless they can be put to good use. The entrepreneur’s roles is to co-ordinate such factors with various others that he encounters in his day-to-day administration. With foresight and careful planning, he will be able to forge ahead and achieve his goals. But in many instances, bad management will wreck an entire organization even with the best of the locational factors.

 

6) Capital: For the inception and continuance of an industry, capital is indispensable. Whether it be a private or a joint-stock company, unless the enterprise is financially sound, there will be no prospects for the firm. Fortunately, capital is a very mobilefactor.Where the industrial potential is good, even in adverse geographical areas, financiers will invest. In the desert of Chile there are copper smelting and nitrate extracting industries. Tin is mined in the Andean highlands at a height of over 3660 m (12 000 feet). Water and provisions are brought in daily from Perth to the gold-mines at Kalgoorlie and Murchison in the Australian Desert, more than 560 km (350miles) away. All these are evidence of great mobility of capital. It is not an exaggeration to state that the majority of tropical plantations, mines and large firms are in the hands of foreigners, because these are the people who have capital.

 

7) Other factors: A close examination of some of the world’s minor industrial areas will reveal that several other local factors have influenced industrial location. These complex factors may be physical, social, political or historical. A natural site, such as a sheltered coast or a strategic junction, may be the key factor to a certain factory siting. A stimulating climate like that of the temperate zone is much more comfortable to work in than that of the tropics. The on-shore Westerlies were partly responsible for the rise of the Lancashire cotton textiles industry because a humid atmosphere is conducive for cotton spinning. The invention of artificial humidifiers has since offset the advantage. A stable government provides the right climate for foreign investment, Singapore is striving to do this. Disturbances caused by Red Guards in Hong Kong and political conflict in mainland China caused many international investors to divert their capital from Hong Kong for a time, though this setback was overcome. Bangladesh will feel the effects of its civil war for much longer. The confidence of overseas investors will have to be restored.

In many countries, the government has found it necessary to intervene in the location of industries, for political, economic or military reasons. In Russia a dispersed pattern of industrial location was established in the belief that ‘putting all the eggs in one basket’ is far too risky. Her development of the Trans-Urals and Kuznetz (Kuzbas) industrial districts was aimed at further decentralization of her industries.

Efforts made in industrial development by the T.V.A. (Tenneeses Valley Authority) in the United States are part of the scheme to rehabilitate this ‘most depressed area’ of America. Similar attempts are being made in the United Kingdom to encourage industrial undertakings in the depressed ‘Development Areas’, such as the north-west. As an inducement to potential investors, very favourable terms are being offered, such as lower local rates, low cost lands, interest-free loans, government assistance and other preferential treatment.

Whatever advantages an industrial site may enjoy, there is no guarantee that the advantage will be permanent. New highways may divert much of the traffic; a previous unorganized labour force may suddenly be unionized, as in Japan; local rates may be increased; revised factory legislation may double the cost of production; elections may return a new government and so forth. The world is changing so quickly that an advantage at one time may not be so by the turn of the century. There is always a risk in business and one must be very subjective when analyzing the factors that affect industrial location at any one time. And yet we have seen that although coal is no longer an important location factor as it was, coalfields are still the main industrial areas. This is partly because a supply of skilled labour has been built up, thus offsetting some other disadvantages, and partly because of the huge expense involved in setting up new lines of communications, workshops and homes for factory workers in new sites with locational advantages. When industries stay in traditional sites in this way it is called industrial inertia.