The localization of industries is the concentration of different industrial units in a particular area due to the presence of certain facilities. An industrial park is a dedicated zone in a city strictly meant for industrial and commercial activities. Industrial parks contain various facilities related to commercial activities; these include office blocks, storage facilities, and processing zones, among others. An example of industrial parks is the Light Industry and Science Park I in the Philippines. In most cases, industrial parks are constructed by private investors then sold or leased out to other business owners. This article outlines the pros and cons of industrial parks.
Pros Of Industrial Parks
Economies Of Scale
Economies of scale refer to the benefits a company or individual enjoys when purchasing or selling certain items in bulk. When companies in an industrial park adopt centralized buying and selling, they enjoy economies of scale. All companies in need of the same raw materials in an industrial estate can pool their raw material requirements and make bulk purchases. Bulk purchases allow for quantity discounts resulting in lower prices. Similarly, companies manufacturing the same or related products could pool together when selling. The centralized selling of items reduces the distribution costs for the products.Availability Of Infrastructure
Before being leased out or sold, industrial parks are equipped with the necessary infrastructure. These include roads, electricity, water, and communication lines, making the production process easier for different companies. This infrastructure allows companies to begin production processes immediately after moving into industrial parks. Other than basic infrastructure, shared amenities such as banks and medical centers are located within industrial parks. The amenities guarantee a secure environment for industry workers and business transactions.Economies Of Agglomeration
Economies of agglomeration refer to the benefits companies enjoy by being close to each other. These benefits include the availability of skilled labor. Industrial parks such as the Lighting Industry and Science Park I bring together a variety of skilled individuals to work for different companies. These people are accessible whenever some companies need their services. Repair and maintenance services in industrial parks take a shorter time due to the availability of service providers and components.Cons Of Having Industrial Parks
The most significant disadvantage of industrial parks is increased environmental pollution. When manufacturing and processing firms are located in one place, the amount of waste released to the environment increases. Pollutants emitted by companies include carbon released into the atmosphere and chemical wastes released to rivers. However, some industrial park owners and governments have put in place measures to curb pollution. As part of the requirements by governments, industrial parks should have waste treatment plants. This helps to reduce the amount of toxic waste released to the environment.The number of industrial parks is expected to rise with time. The lighting industry and Science Park I, for instance, is part of other industrial parks still under development. As more inventions are made and the need to manufacture rises, entrepreneurs look for industrial parks since they are cost-effective. Some industrial parks allow different companies to operate while others are specifically meant for specific industries.
