HKDSE Geography/M3/Site Factors

A site factor is a locational factor that is about the manufacturing site itself. A situation factor is a locational factor that is about the distance between the manufacturing site and other sites.

Factors Related to Inputs

Capital

Financial capital (a subset of working capital) can be better obtained in large cities with great commercial development, and in more open economies with open financial markets for loans and shares. Financial capital is essential for industries with high set-up and operation costs, such as hi-technology industries like biotechnology.

Fixed capital is also important for particular industries. Fixed capital is essential for heavy industries like car manufacturing, which have a high level of mechanisation and automation as most manual production processes have been replaced by robots and machinery.

Labour

Attributes of labour include:

• Labour cost (wage rate): A labour-intensive industry requires low labour costs to maximise profits. Most often, light industries fall into this category.
• Labour supply: A labour-intensive industry relies on a large labour supply to support production. Again, light industries fall into this category.
• Education level of labour: Sometimes, workers with special skills (such as blacksmiths) are needed. Sometimes, workers with a high level of education are needed (e.g. the software development industry).

Note that labour cost and education level are usually negatively related.

Physical Attributes of the Land

These physical attributes are favourable for industrial development

• Extensive flat land is needed for the development of heavy industries like iron and steel, oil refinery (CE97Q36) or shipbuilding.
• A mild climate is needed for industries like opencast mining and quarrying, which take place in open spaces and may be affected by wind and rain.
• Drainage is essential for industries that require cooling or water discharge, such as dyeing.

Factors Related to Socioeconomic Situation

Infrastructure

Infrastructure includes:

• Water supply. This is especially important for fabrication processes that require water for cooling.
• Electricity supply. This is especially important for industries that require great electricity input to power machinery.
• Gas supply.
• Communications, wired or wireless: Telephone, fax, Internet access. This is especially important for company headquarters, since they need to contact branch offices and other outlying plants from there. It is also important for industries that require close communication with clients or partners.

Transport

Transport is essential for:

• Commuting of workers. Sometimes, workers may not live in the same area as the industrial area, particularly in areas with good urban planning. Workers may have to commute from residential to industrial areas.
• Distribution of outputs. For example, an efficient transport network is needed for the newspaper industry to distribute newspapers in a timely manner. Warehouses should be placed near transport hubs like piers and airports for the goods to be quickly transported elsewhere.
• Delivery of inputs. Some industries require inputs to be transported from elsewhere. They thus require a good transport network.

Examples:

• Distribution centres and warehouses are close to transport hubs like ports (water), airports (air) and highways (land).

There are three types of transport: water, air and land. They are for different purposes:

Water	Air	Land
Long distances that require crossing oceans/along rivers Heavy, bulky products (higher tendency than land)	Perishable products (must be transported quickly) - food Products of high value - jewellery Very long distances Fragile goods (e.g. expensive vases)	Heavy, bulky products Door-to-door services Long distances on land

Examples:

• Newspaper distribution - Land
• Food - Land and air
• Jewellery - Air
• Books ordered on Amazon - Water

Technology Level

The level of technology is essential for high-technology industries such as the biotechnology, information technology and aerospace industries.

Some industries require great research and development. These are known as R&D-intensive industries.

Government Support

Government support can attract firms to an area in several ways:

• Provide tax cuts or subsidies to firms
• Have laxer pollution laws
• Improve other factors:
  • Build tertiary education institutes to facilitate high-tech industries
  • Improve infrastructure and transport