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

The issue of production location is crucial and requires careful analysis. The fact is that each industry depends on many factors. The economist's task is to find the most profitable place for the development of activity so that production is as profitable as possible.

What is the factor of the location of production

The territorial distribution of industries is determined by the combined influence of many factors. Their quantitative and qualitative correlations form different options for the location of production enterprises. Such a spatial orientation depends on the security of the country or its individual regions with natural, labor, material resources, the level of scientific, technical and economic development of the area, the available infrastructure and the historical features of the territory.

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

The basic laws of the distribution of production forces

Placement of production takes place according to patterns that are an identification of trends in the location of the enterprise.

These patterns suggest:

• effective placement, which would ensure the most rational use of resources;
• the existence of a close relationship between the location of production and the level of economy in the region;
• the company's dependence on the specialization of local labor resources;
• assessment of the integrated 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 a reduction in the cost of production and marketing.

To select the most profitable location of the enterprise, a detailed cost analysis is required based on knowledge about the 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 is equipment, transport, buildings.
3. Costs of raw materials.
4. Labor cost.
5. Transport costs.
6. Interest rate on loans.
7. Depreciation of fixed capital.

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

Classification of factors

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

1. Natural - the degree of provision of the region 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 geographical location of the region, the construction time, the amount of capital and current costs.
5. Environmental - the possibility of creating favorable conditions for work and living of the local population, the degree of use of natural goods without harming the environment.

Each industry has its own set of specific factors. For example, the key factors in the location of engineering production are the scientific and technical base, cooperation, specialization and the availability of labor resources.

The experts conducted an analysis of the resource intensity of all areas of the economy and assessed the extent to which the main factors in the location of production influence them. The table illustrates the degree of dependence of major industries on various resources.

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

The number of points shows how the same factors of production distribution influence different sectors of the economy . The table shows the strong dependence of light industry on the location of the consumer, economic production on resource and fuel and energy factors, and engineering on the labor potential of the region. The larger the developed country, the higher the proportion of industries that gravitate towards the consumer. Thus, we can talk about the global trend of increasing the degree of influence of the consumer factor.

Natural factors

Natural factors affecting the distribution of production were crucial in the early stages of industrialization. And only in the era of scientific and technological revolution did this connection weaken a little. But still, for the extractive industries, this group of factors continues to be the main one.

Many deposits and basins of natural resources are practically devastated, so mining enterprises began to move to new development sites, which in most cases are difficult to access and are characterized by extreme conditions. For example, oil and gas production in the sea and bays. However, the development and operation of new deposits of natural resources requires considerable investment and threatens environmental pollution.

Socio-demographic factor of the location of production

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

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

• highly labor-intensive - high human labor costs for the production of a small amount of products (production of televisions and electronics, textile industry, machine tool building);
• medium-labor-intensive - approximately the same ratio of labor costs to other costs (chemical and light industry);
• non-labor-intensive - minimum labor costs per employee per unit of output (energy industry, metallurgy).

The scientific factor of the location of production

In the era of scientific and technological revolution, this factor was singled out as a separate group because of its strong influence on the location of production. This primarily relates to high-tech industries, which are mainly concentrated in large cities. For example, in France, most of the scientists work in Paris, in Japan - in Tokyo. In some countries, entire “cities of science” are being created, specializing in various studies.

During the period of rapid scientific and technological development, new forms of territorial localization of science arose - technoparks and technopolises. First, they swept the United States (Silicon Valley), then moved to Western Europe, Asia and other countries.

Technopark - a combination of research firms that arise around a large laboratory, institute or university. The main goal of such a park is to reduce the time for practical implementation of scientific ideas.

Technopolis is a specially created science campus that is engaged in the development of new innovative technologies, the training of qualified personnel and the development of high-tech industries. Japan is the founder of technopolises, but soon other countries took up this idea.

The economic factor of the location of production

Current market conditions require consideration of financial factors when choosing a location for the enterprise: conditions for investment and taxation, the availability of production facilities and infrastructure. Thanks to financial benefits, many cities and countries of the world have strengthened their economies (Hong Kong, Singapore, South Korea). Now this factor favorably affects the development of production in Poland, Hungary, and the Czech Republic.

The economic group of factors also includes the technological development of the region, the possibility of attracting investment and capital from the outside, geographical location, transport connection, economic relations with large regions and countries, international activity. The transport factor of production location is considered very influential. Given the cost of transportation, the company gravitates to a source of raw materials or to the consumer. If the costs of resources and fuel are lower than the cost of the finished product, production can be placed at large distances from raw materials. In the opposite case, the localization of the enterprise should be chosen near resources in order to reduce transport costs.

Ecological group of factors

Due to the sharp increase in world production, enterprises are increasingly considering environmental factors affecting production location. Rapid scientific and technological development, increasing the rate of extraction of natural resources have significantly increased the pressure on the environment. As a result, environmental problems have arisen in some regions, which can at any moment turn into a natural disaster.

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