23: The Location of Large Factories
It seems that in every country, large manufacturing establishments arise in clustered areas. Before the availability of cheap modes of transportation, operations were located next to the resources they required: an abundant source of raw materials, sources of power, a concentration of skilled labor, or a large number of customers for the finished product.
Raw materials are most significant when the ratio of their value to their weight is very low. Metals, for example, require the transportation of heavy ore in large quantities from the mine to the smelter to produce a small amount of purified metal. As such, the ore must be refined in very close proximity to the spot that affords them. It is impractical to transport ore by road, though transportation by barges enables some ores (particularly copper) to be transported to more remote refineries.
He dwells a while on rivers, as they have always been the centers of great activity and civilizations were founded along their banks. The availability of water for agriculture and the use of the river itself as a means of transportation is valued to a large number of industries. Before roads were built, they were the only means of transporting goods and people in any appreciable quantity.
While people may gather in a given place for its functional conveniences, the amassing of people itself becomes a value: they provide a labor force and a customer base for large production operations. A major industry also gives rise to many supporting industries that are located nearby, and all benefit from the communication and exchange with one another.
Once a manufacturing establishment has been developed, it is exceedingly difficult to relocated it. Aside of the fact that buildings and machinery are not easily removed and replaced, there is also the manner of the relationships established with stakeholders: customers, suppliers, employees, and others have established themselves in the area and are unlikely to relocate with a factory.
Where a factory is to be removed, there are often "serious consequences" to the communities. The employees fear the loss of their livelihood, the merchants fear the poverty of their customers, and so on. It is a consideration that must be made with great discretion, and with full knowledge of the social upheaval that may be caused.
And where a factory is to be created, there are likewise serious consequences. Competing industries recognize that an efficient operation is a threat to their business - both owners and employees will be concerned of this threat. Other firms in the area, which compete for labor and supplies, will also be inconvenienced. While some in a community welcome the jobs and income that come with a new factory, others are staunchly opposed to any change in the status quo.