Industrial Location Factors, Trends, and Policies

Posted on Mar 6, 2025 in Geography

Factors and Trends of Current Industrial Location

Current Factors of Localization

The classic factors of localization have declined in importance following the industrial crisis and have given prominence to new factors:

  • Diminished importance of proximity to natural resources.
  • Expansion of sales areas.
  • Improved transport and communications.
  • Labor remains an important factor.
  • Currently, a key factor is access to innovation and current information.

Trends in Location: Diffusion and Concentration

Marked changes have altered industrial location trends:

  1. The diffusion of industry to peripheral areas, hitherto unattractive, is due to the following factors:
    • The problems presented by large industrial concentrations.
    • Technological improvements allow for the separation of direction and management functions.
    • New strategies of capitalism.
    • Development of endogenous industrialization.
  2. Secondly, maintaining the strong appeal of existing plants.

Industrial Areas and Regional Imbalances in Spain

Developed Industrial Areas

The main developed industrial areas in Spain are the metropolitan areas, especially Madrid and Barcelona. Recent evolution is marked by contradictory trends:

  • On one hand, we witness the collapse of mature sectors.
  • Moreover, there is an industrial revitalization.

Areas and Industrial Hubs in Expansion

Following types may be distinguished:

  • The metropolitan areas are in industrial decline and undergoing a conversion process.
  • Peri-urban fringes have become very attractive to relocate industries, as have nearby towns.
  • Industrial development axes are located along the main communication routes.
  • In some rural areas, industrial areas and industrial hubs have increased.

Declining Industrial Areas

Declining industrial areas are characterized by:

  • Specialization in mature industrial sectors in crisis.
  • Medium or low labor qualifications.
  • Long-standing environmental problems.
  • The incorporation of Spain into the EU has exacerbated the situation.

Areas of Induced and Low Industrialization

  • Areas of induced industrialization are Aragon, Castilla y Leon, and Andalucia.
  • Areas of limited industrialization are Castilla-La Mancha, Extremadura, the Balearic Islands, and the Canary Islands.

Environmental Problems of Industry

Industry causes environmental problems in several aspects:

  • The misuse of natural resources.
  • Some industries pollute the environment.
  • Industries also degrade the aesthetic landscape.

Current Industrial Policy

Decreased Government Intervention

Reducing state intervention in industrial activity has the following manifestations:

  • Increasing openness to the outside.
  • Some of the most profitable companies have been privatized.

Policy to Correct Structural Problems

Highlights are:

  • Acceleration of conversion.
  • Increasing the competitiveness of companies.
  • Increasing research.
  • Decreasing technological dependence.

Policy to Correct Regional Imbalances

Coordinated outstanding performances so far in this regard can be grouped into two major sections:

  • Industrial promotion policies:
    • Incessant regional laws.
    • Regional development agencies.
  • Endogenous industrialization policy:
    • Micro-support of local SMEs.
    • Promoting innovation.

Environmental Policies

Main actions to tackle these are:

  • For the misuse of resources, the focus is on sustainable development.
  • With respect to media contamination, the policies adopted are:
    • The protection of certain spaces.
    • The prevention of negative effects.
    • Promotion of research.
    • Corrective measures have been adapted.
  • For the degradation of the aesthetic landscape, some rehabilitation operations have been undertaken.