HKDSE Geography/M3/Industrial Location
Production means creating value or adding value to something. For example, a piece of wood that costs $30 can be made into a chair costing $40.
An industry refers to a single sector of economic production and is divided into four types:
- Primary industries, which focus on the extraction of natural raw materials;
- Secondary industries, which turn raw materials and intermediate goods into intermediate goods and final goods;
- Tertiary industries, which provide services to other industries and to conumers;
- Quartenary industries, which deal with information.
The focus of this module is the factors that cause firms to move in or out an area.
- Push factors are factors that discourage firms from locating in an area.
- Pull factors are factors that encourage firms to locate in an area.
Single-Plant Firms and Multi-Plant Firms
A firm that that has a single site is a single-plant firm. Its headquarters, production activities, etc., are all performed in a single plant.
- It is usually in an early state of development and of small scale.
- Few inputs and few outputs.
- It serves local markets rather than international ones.
A firm that has multiple sites is called a multi-plant firm. Different production processes are located in regions with different locational factors. This mode of production is multi-point production.
Sometimes, the firm has different processes spread to different countries. This mode of production is called multinational production and such enterprises are multinational enterprises (MNEs) or transnational corporations (TNCs).