Causes of Further Concentration

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Causes of Further Concentration

After an industry has got going in a certain place,  then has a tendency to stick to and further gravitate to that place, If any new entrepreneur wants to enter this industry. he. too. will go to that place to start his business rather than start it elsewhere.

Several reasons account for this tendency. Trained labor is readily available there. Plant and accessories and raw materials can be conveniently had. Financing agencies are also established in that place. Several supplementary and subsidiary industries are establish  in course of none, and they arc a valuable  to the main Hindu: try. Technical journals are published which are found useful b) tone  industrialists. Associate on of entrepreneur are form J to safeguard and promote common interests lean of communication and transportation become special ed and adapted to the needs of the industry.

Above all, there i~what is called Indus trial inertia. Once established in a place. the industry docs not like tel move out. It is human nature that one is prepared to poor up with known difficulties rather than face unknown ones.

Consequences of Localisation

Localisation. however. is not an unmixed blessing. All the factors mentioned above as the causes of persist thence of an ind try are the several advantages afforded by the place in which It has become localized  availability of labor, capital. raw materials. etc  and the benefit of specialized transport. subsidiary.

Localisation. however. is not an unmixed blessing. Dependence of a place on one industry is dangerous. If the industry happens to be in a depressed state, all the people depending on the main as well as subsidiary industries will suffer. It is like placing all the eggs in one basket.

The specialized labor loses mobility and may not find alternative openings.


The obvious remedy is to start supplementary and subsidiary and other allied industries. The establishment of such industries goes a long way in mitigating the difficulties arising out o;f the localisation of industries and removing the evils.

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Causes of Further Concentration