The main factor in the location of production. The distribution of production factors: table

The question of the location of production is critical and requires careful analysis. The fact that every industry depends on many factors. The task of the economist – to find the best place for development activities to be manufactured as cost-effective.

What is a factor in the location of production

The spatial location of industries is determined by the combined influence of many factors. Their qualitative and quantitative ratio to form different variants of placing of the industrial enterprises. This spatial orientation is dependent on the security of the country or its regions natural, labour, material resources, level of technical, scientific and economic development of the area, existing infrastructure and historical features of the territory.

In the economy, there are several interpretations of the term “factor of production distribution”. Some scientists under the factors involve the resources and conditions necessary for producing a particular type of product, the set of which differs in different geographic zones. Others argue that factors of production are divided into natural resources and social resources (capital, international relations, public influence, the activities of large companies).

Main regularities of location of productive forces

The production happens according to the laws, which represent the identification of trends in the location of the company.

These patterns include:

• Effective accommodation which would ensure the most efficient use of resources;
• There was a strong link between location of production and the level of the economy in the region;
• The company's dependence on specialization of the local workforce;
• Evaluation of the comprehensive development of economic relations in the region.

Analysis of the distribution of production factors

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

To select the most profitable enterprise is required to conduct a detailed cost analysis on the basis of knowledge about the factors influencing the location of production. So, you need to calculate the following metrics:

1. The Cost of renting or purchasing land.
2. The Cost of capital-equipment, vehicles, buildings.
3. The Cost of raw materials.
4. Labor Costs.
5. Transportation costs.
6. Interest rate on lending.
7. Depreciation of fixed capital.

Of these types of costs in the location of production to the greatest extent affected by the cost of raw materials, labour, transport and fuel.

Classification factors

Depending on what functions there are the following distribution of production factors:

1. Natural – the degree to which natural resources of the region; climatic, orographic, geological and other conditions.
2. Socio-demographic – the availability of human resources and social infrastructure.
3. Technical, Scientific-technical and technological equipment in the region.
4. Economic & ndash; development of transport network, the region's geographical location, timing of construction, the amount of capital and production costs.
5. Environmental & ndash; the possibility of creating favorable conditions for working and living of the local population, the utilization of natural wealth without compromising the environment.

Every industry has its own set of specific factors. For example, key factors of production engineering – scientific and technical base, cooperation, specialization and availability of labor.

Experts conducted an analysis of the carrying capacity of all economic sectors and assessed the extent to which they affect the main factors of production distribution. The table illustrates the dependence of major industries from different resources.

Grading Scale: 0-no influence; 1-weak effect; 2-strong effect; 3 – factor plays a crucial role.

The number of points shows how different sectors of the economy influenced by the same factors of production distribution. The table shows the strong dependence of the light industry from the location of consumer, commercial production from resource and energy factors, and engineering from the labor potential of the region. The more developed a country is, the higher the share of industries that gravitate to the consumer. Thus, it is possible to talk about global trends of increasing influence of the consumer factor.

Environmental factors

Natural factors influencing the location of production, were crucial in the early stages of industrialization. And only in the era of NTR, this relationship weakened slightly. But still for extractive industries this group of factors continues to be the main.

Many fields and pools of natural resources almost empty, so the mining companies started to move to new places of learning, which in most cases inaccessible and characterized by extreme conditions. For example, oil and gas extraction in the sea and bays. However, the development and exploitation of new deposits of natural resources requires considerable investment and threatens pollution of the environment.

Socio-demographic factor of the location of production

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

The labour Factor is estimated by the working time per unit manufactured products. For comparison, using the indicators of wages and the cost of the finished product. There are three groups of labor costs of production:

• Vysokotochnye – the high cost of human labor in the production of small quantity production (production of TVs and electronics, textiles, machine tools);
• Srednerazmernye – roughly the same proportion of labor costs from other costs (chemical and light industry);
• Easy – the minimum cost of the employee per unit of production (energy, metallurgy).

Scientific factor in the location of production

During the STC, this factor was placed in a separate group because of its strong influence on the location of production. First and foremost, this applies to knowledge-intensive industries, which are mainly concentrated in large cities. For example, in France most of the scientific staff working in Paris, in Japan-in Tokyo. In some countries, created whole "science city" is a specialized research.

In a period of rapid scientific and technological development created new forms of territorial localization of science-technology parks and technopolises. First, they swept the US (Silicon valley), then moved to Western Europe, Asia and other countries.

Technopark – connecting research firms that arise around the major of the laboratory, Institute or University. The main objective of this Park is to shorten the duration of the practical implementation of scientific ideas.

Technopolis – specially created scientific community that develops new innovative technologies, training of qualified personnel and the development of knowledge-based industries. The founder of techno is Japan, but soon this idea was picked up by other countries.

Economic factor of production distribution

The Modern market conditions require to consider financial factors when choosing the localization of the enterprise: the conditions of investment and taxation, the availability of production facilities and infrastructure. Due to the financial benefits, many cities and countries around the world have strengthened their economies (Hong Kong, Singapore, South Korea). Now this factor has a positive effect on the development of production in Poland, Hungary, the Czech Republic.

Also to the economic group of factors include technological development, the possibility of attracting investment and capital from the geographical position, transport connection,economic relations with the major regions and countries, the international activity. Is considered to be very influential transport factor in the location of production. Given transport costs, the company tends to source raw materials or to the consumer. If the costs of resources and fuel are less than the value of the product, production can be placed at greater distances from raw material. In the opposite case, the localization of the enterprise should choose resources in close proximity to reduce shipping costs.

The Environmental group of factors

Due to the sharp increase in world production more and more often companies take into account environmental factors influencing the location of production. Rapid scientific and technological development, the growth rate of extraction of natural resources greatly increased the burden on the environment. The result in some regions experiencing environmental problems which at any moment can turn into a natural disaster.

The most disadvantaged industries include chemical, cement, metallurgical, nuclear energy and others. The placement of enterprises in these sectors requires an especially thoughtful approach.