Sargent Florence Theory Of Industrial Location Pdf 30
Chiquita Palafox
On the basis of production census he has tried to find out the statistical measures of location and has not accepted the traditional view of the geographical context, not the region or area as such but the working population in that area is more important. Sargent has used two new concepts in his theory of location.
Location factor indicates the centralization or otherwise of an industry. If the location factor index is greater than unity, there is a tendency of centralization; on the other hand, if it is less than unity, the otherwise is true. In case of unity, a state of evenness exists this indicates that there is neither centralization nor decentralization.
We take an example to explain the use of this formula. Suppose that the population of industrial workers in a country is 500; workers engaged in a given area is 200 and workers engaged in a particular industry (cement, etc.) are 100.
Coefficient of localization indicates the propensity of concentration of industries. This has no relation as such with the area. If the percentage of workers over different areas is also given in percentage, the variance between the two percentages is divided by 100 which give the coefficient of location.
If this coefficient is zero, it will mean that industries are evenly distributed over all the areas; if the coefficient is unity or one, it indicates concentration of industries in one area. The coefficient being greater or less than unity will indicate tendency of centralization or decentralization respectively.
The theory given by Florence emphasizes the number of workers in calculating the index and coefficient but ignores production. It is difficult to know the productive capacity of different areas. In spite of these deficiencies the theory at least suggests a way to know the tendency of localisation of industries.
1. The theory is not in a position to explain the causes responsible for the choice of location of an industry. It can only help in finding out the existing state of industrial distribution in a country. It is said that the theory is only the investigation of status quo and nothing beyond that.
5. While formulating his theory, he has not given due place and consideration to various forces of concentration which have direct bearing on the location of industrial units namely the role of external economies or tax incentives etc.
Industrial location is a field of study that interests both economists and geographer, because the location of industriesis of particular importance in studying the internal structure of regions and in many cases, guides the pattern ofspatial development. The theory of industrial location attempts to explain answers for three important questions.They are; Why the industries are located where they are Why the locations are shifted, And what can be the best location for a particular industry keeping in view there source endowments of different regions, transport network , existing demand, potential demand etc.,There are different versions developed by different economists on the theory of industrial location. Each one of themtries to find out the reasons for industrial location in an economy. Among them, the first attempt in developing atheory of location was made by a German scholar, Von Thunen, in regard to agricultural location. Thunen, consideredthe problem of location for various forms of agricultural production in relation to markets.
Weber explained his theory interims of influence of each factor on industrial location. Thus, now let us consider theinfluence of following costs separately on industrial location: they are: Transportation costs Labor costs Agglomeration Degglomeration costs
Critical Appraisal:(a) According to BAL Krishna, Sargent Florence contribution cannot be placed in the category of a theory oflocation. Indices provided by him can only reveal the existing state of distribution of industries in a particularcountry. They are incapable of assigning reasons for a particular form of concentration and much less through anyuseful light on the question of a correct allocation of industries among different regions. Therefore, Sargent Florencecontribution cannot serve as a guide in framing any policy for the future location of industries in a country. (b) TheCo-efficient of localization is based essentially on the pattern of distribution in each country so that it would varyfrom country to country according to local conditions and may also vary within each country with furtherindustrialization. It would be difficult to conclude merely on the basis of coefficient whether an industry has atendency for concentration. At best it can have only a verification value. (c) the location factor is based on thenumber industrial workers employed in each area but a numeric reckoning of this nature is not always a sure guidethe degree of concentration of an industry. A better basis of comparison would be the output in each area. Forinstance a combination of higher proportion of capital in the form of more unto date machinery and consequently asmaller proportion of labor might yield a higher output than another region with a larger proportion of labor.
A model of industrial location proposed by A. Weber (1909, trans. 1929), which assumes that industrialists choose aleast-cost location for the development of new industry. The theory is based on a number of assumptions, amongthem that markets are fixed at certain specific points, that transport costs are proportional to the weight of the goodsand the distance covered by a raw material or a finished product, that perfect competition exists, and that decisionsare made by economic man.
Several natural resources such are water are ubiquitous (available everywhere) while many production inputs such aslabor, fuel and minerals are available at specific locations. According to Weber, three main factors influenceindustrial location; transport costs, labor costs and agglomeration economies. Location thus imply an optimalconsideration of these factors. Solving Weber's location model often implies three stages; finding the least transportcost location and adjusting this location to consider labor costs and agglomeration economies. Transportation is themost important element of the model since other factors are considered to only have an adjustment effect. To solvethis problem, Weber uses the location triangle within which the optimal is located. The above figure illustrates theissue of minimizing transport costs. Considering a product of w(M) tons to be sold at market M, w(S1) and w(S2)tons of materials coming respectively from S1 and S2 are necessary. The problem resides in finding an optimalfactory location P located at the respective distances of d(M), d(S1) and d(S2). Several methodologies can be used tosolve this problem such as drawing an analogy to a system of weights and pulleys (Varignon's solution) or usingtrigonometry. Another way preferred among geographers, particularly with GIS, is to use cost surfaces which areoverlaid. Weber's location theory explains well the location of heavy industries, particularly from the industrialrevolution until the mid twentieth century (the sector that Weber was looking at). Activities having a high level of useof raw materials tend to locate near supply sources, such as aluminum factories will locate near energy sources(electricity) or port sites. Activities using ubiquitous raw materials, such as water, tend to locate close to markets. Toassess this issue, Weber developed a material index which is simply the weight of the inputs divided by the weightof the final product (output). If the material index is higher than 1, location tends to be toward material sources. If itis less than 1, location tends to be toward the market. Contemporary developments in manufacturing, the reduction oftransport costs and new economic sectors (high technology) have changed locational behavior substantially,involving much less consideration to Weber's principles. Still, these principles apply well for industries with a veryhigh material index.
Alfred Weber's Theory of Industrial LocationAlfred Weber formulated a theory of industrial location in which an industry is located where the transportation costsof raw materials and final product is a minimum. He singled out two special cases. In one the weight of the finalproduct is less than the weight of the raw material going into making the product. This is the weight losing case. In
But the indices prepared by Sargent Florence are of immense significance for studying the location dynamics in anycountry. The indices are an invaluable guide for analyzing the trends of industrial development in a country. Somehave felt that there should be a judicious combination of the pure theory of Weber with the indices provided bySargent Florence to enunciate a policy of scientific location of industries for a country. Even then some limitationswill remain because both of these approaches are based on the capitalist structure of societies where costconsiderations predominate over welfare considerations. If industrial location is influenced by cost consideration
His theory is mainly based on inductive analysis and while explaining location factor of an industry he has taken into consideration location factor and co-efficient of localisation. Now a question arises as to what is location factor. According to him, it is an index of the degree of concentration of an industry in a particular region. Now this raises another problem namely how to arrive at the index, to which Sargant has made a reference.
According to Saviyya and Dass, This index is calculated by taking into consideration two ratios, namely, the percentage of workers of the industry in question found in the region under consideration and the percentage of all industrial workers in the country.
In calculating index to find out the location factor the first one is divided by the second and if the quotient is one, the location factor is said to unity and it can be said that the industry is evenly tribute over the whole country. If quotient is above unity, then the conclusion can be that the region under reference has higher share of industry.
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