The main factor in the location of production. Factors of production location: table

The issue of the location of production is decisive and requires careful analysis. The fact is that each industry depends on many factors. The task of the economist is to find the most advantageous place for the development of activities, so that production is maximally profitable.

What is the factor of location of production

The territorial distribution of industries is determined by the combined influence of many factors. Their quantitative and qualitative relationships form different variants of the location of manufacturing enterprises. Such spatial orientation depends on the availability of natural, labor, material resources, from the level of scientific, technical and economic development of the locality, the available infrastructure and the historical peculiarity of the territory, to the country or its individual regions.

In the economy there are several interpretations of the concept of "production allocation factor". Some scientists under the factors imply resources and conditions necessary for the manufacture of a certain type of products, the set of which differs in different geographical areas. Others argue that the factors of production are divided into natural wealth and social resources (capital, international relations, state influence, the activities of large companies).

The main regularities of the location of production forces

Placement of production occurs according to patterns that are a revealing trend in the location of the enterprise.

These patterns suggest:

• Effective allocation, which would ensure the most rational use of resources;
• The existence of a close relationship between the location of production and the level of the economy in the region;
• The dependence of the enterprise on the specialization of local labor resources;
• Evaluation of the comprehensive development of economic relations in the region.

Analysis of factors of production location

The location of the enterprise is key to the effectiveness of its activities. It is a kind of economic benefit, the result of which is manifested in the reduction of costs for production and sales.

To choose the most profitable location of the enterprise, it is required to conduct a detailed analysis of costs based on knowledge about factors affecting the location of production. So, it is necessary to calculate the following indicators:

1. The cost of renting or buying land.
2. The cost of fixed capital - equipment, transport, buildings.
3. Costs for raw materials and materials.
4. Cost of labor.
5. Transport costs.
6. Interest rate on lending.
7. Depreciation of fixed capital.

Of the listed types of costs for the location of production, the costs of raw materials, labor, transportation and fuel are most affected.

Classification of factors

Depending on the functions performed, the following factors are distinguished:

1. Natural - the extent to which the region is endowed with natural resources; Climatic, orographic, geological and other conditions.
2. Socio-demographic - the availability of labor resources and the state of social infrastructure.
3. Scientific and technical - the level of technical and technological equipment of the region.
4. Economic - the development of the transport network, the geographic location of the region, the timing of construction, the amount of capital and stream costs.
5. Environmental - the opportunity to create favorable conditions for labor and residence of local people, the degree of use of natural goods without damage to the environment.

Each industry has its own set of certain factors. For example, the key factors in the location of machine-building industries are the scientific and technical base, co-operation, specialization and availability of labor resources.

The experts analyzed the resource intensity of all directions of the economy and assessed the extent to which the main factors of the location of production affect them. The table illustrates the degree of dependence of the main industries on different resources.

Rating scale: 0 - no impact; 1 - weak influence; 2 - strong action; 3 - the factor plays a decisive role.

By the number of points, one can see how the same factors of the location of production influence the different branches of the economy . The table shows a strong dependence of light industry on the location of the consumer, economic production from resource and fuel-energy factors, and engineering from the labor potential of the region. The larger the developed country, the higher the share of industries that gravitate toward the consumer. Thus, we can talk about the global trend of increasing the degree of influence of the consumer factor.

Natural factors

The natural factors affecting the location of production were decisive in the early stages of industrialization. And only in the epoch of the scientific and technological revolution this connection has weakened slightly. Nevertheless, for the extractive industries this group of factors continues to be the main one.

Many deposits and basins of natural resources are practically devastated, therefore extracting enterprises began to move to new places of development, which in most cases are difficult to access and characterized by extreme conditions. For example, the extraction of oil and gas in the sea and bays. However, the development and exploitation of new deposits of natural resources requires considerable investment and threatens to pollute the environment.

Socio-demographic factor of production location

Socio-demographic factors include the population, the state of social infrastructure, and the analysis of the quality and quantity of labor resources.

The labor force factor is estimated by the expenditure of working time per unit of manufactured products. For comparison, use the indicators of wages and the cost of finished goods. There are three groups of labor inputs:

• Highly labor-intensive - large expenditures of human labor for the production of small quantities of products (production of television sets and electronics, textiles, machine tools);
• Medium-labor - about the same ratio of labor costs to other costs (chemical and light industry);
• Labor-intensive - minimum labor costs per employee (energy industry, metallurgy).

Scientific factor of production location

In the era of scientific and technological revolution, this factor was allocated to a separate group because of its strong influence on the location of production. First of all, this refers to the science intensive industries, which are mainly concentrated in large cities. For example, in France, most researchers work in Paris, in Japan - in Tokyo. In some countries, entire "cities of science" are created, specializing in different studies.

In the period of rapid scientific and technological development, new forms of territorial localization of science arose - techno-parks and technopolises. First they covered the US (Silicon Valley), then moved to Western Europe, Asia and other countries.

Technopark is a combination of research firms that arise around a large laboratory, institute or university. The main purpose of such a park is to shorten the period of practical implementation of scientific ideas.

Technopolis is a specially created scientific town that is engaged in the development of new innovative technologies, the training of qualified personnel and the development of knowledge-intensive industries. The founder of technopolis is Japan, but soon this idea was picked up by other countries.

Economic factor of production location

Modern market conditions require to take into account financial factors when choosing the location of an enterprise: investment and taxation conditions, availability of production capacities and infrastructure. Thanks to financial incentives, many cities and countries of the world strengthened their economies (Hong Kong, Singapore, South Korea). Now this factor favorably influences the development of production in Poland, Hungary, Czech Republic.

Also, the economic group of factors includes the technological development of the region, the possibility of attracting investments and capital from the outside, geographical location, transport connections, economic relations with large regions and countries, international activity. The transport factor of the location of production is considered very influential. Considering the costs of transportation, the enterprise gravitates to the source of raw materials or to the consumer. If the costs for resources and fuel are lower than the cost of finished products, production can be placed at great distances from the raw materials. In the opposite case, the location of the enterprise should be selected close to the resources in order to reduce transportation costs.

Ecological group of factors

Because of the sharp increase in the volume of world production, enterprises increasingly take into account environmental factors affecting the location of production. Rapid scientific and technological development, increasing rates of extraction of natural resources significantly increased the burden on the environment. As a result, in some regions, environmental problems have arisen, which at any time can develop into a natural catastrophe.

The most unfavorable industries are chemical, cement, metallurgical, nuclear power and others. The location of enterprises in these industries requires a particularly thoughtful approach.