Posted: July 26th, 2022

Economic Geography: Industry Location Analysis

Economic Geography: Industry Location Analysis

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Economic Geography: Industry Location Analysis
Company #1: A Manufacturer Of Smart Technology Marketed Globally
With globalization, centers with high population density and increased access to a cheaper working pool have come to define how manufacturing is propagated. For a company that seeks to deal in the production of smart home appliances, a few factors come to play a key role in how they come to function. The location needs to be accessible to global shipment routes, the workforces need to be chapters, economic and political stability, functional policies, and there needs to be a constant supply of power to streamline production. Here their products do not have significant intellectual protection; as such, the supply of the product to the outside world is divided between official retailers, licensed retailers, and third-party transporters and retailers. The company just needs to make its product available to them.
Coastal gateway cities where many people live are increasingly serving as global nodes, catering to shipment, communication, and access to a large labor force. According to research., “The advantages of location can be altered by changes in transportation and communications technologies that favor some locations at the expense of others” (Ng, 2018). This is because large transportation centers generate adequate demand and are easily equipped to support such an infrastructure and accommodate the shipment of goods. They act as a hub and a node providing a connection between two or more regions of significance in the world.
Real estate would ideally be huge for such an undertaking. This is because the product is complex and will be made up of various parts. Hill (2021) ideally points out that a huge factory will allow all the products to be made in-house and all supporting infrastructure to be catered for to reduce the cost of connection between the variety of stations. Industry analysis of similar factories that manufacture similar equipment points to the fact that the factories may span more than one city block, with an open concept plan, like a city center to accommodate a larger workforce (Field, 2019). The workforce may number thousands of people (Hill, 2021). This will see the company build a huge factory in a satellite city on the outskirts of a bigger city, such as Tesla that built its Gigafactory in the city of Fremont, a satellite semi-urban location within California’s showing- direct access to sea routes. This is a semi-urban location. Here the land is available for a huge production factory; workers can be sourced locally.
Land use is subject to a variety of surveys and evaluations to ensure that it does not affect the largest amount of people. Tesla, for example, has set its first Giga factory on a 150 Hectare property in the outskirts of the city of Fremont. This is because the geochemical mapping of urban areas outlines the potential risks associated with urban soil concentrations and the spread of harmful elements such as chemicals and noise that could trigger greater negative elements requiring costlier and greater action levels (Albanese et al., 2018). Land use as such will see such a facility be set far away from the general public.
Good locations for such a factory will see greater tax incentives and government subsidies offered to such companies so as to promote their business. Higgins (2019) outlines Tesla’s decision to choose China was primarily because it voided paying tariffs and was offered 10% tax incentives for any unit sold within China. Such a conducive environment would also include totality from external forces and freedom, multifaceted with adequate infrastructures such as energy availability and political stability (Toppr, 2018).
Being a huge industrial complex with inhouse operations, the workforce will be diverse, and so will be the equipment. The workers will range from business executives down to the manual laborers in the processing centers and the staff associated with the center’s management (Minh Hang and DiGangi, 2018). The types of equipment in the factory will include transportation equipment within and without the factory (trucks, forklifts, etc.), mechanical arms and robots, programmed machines to automate complex tasks, as well as human labor associated with final checks and balances (Fields, 2019)
Company #2 A Biotechnology Firm
Biotechnology companies specializing in vaccine research, development, and production, have a more complex workforce relative to assemblage companies specializing in the manufacturing of smart technologies. This is because there is a significant risk that goes into research, production, development, and production compared to other manufacturing (Ginsberg and Spigelman, 2007). In this regard, the workforce will be significantly better educated and more career-oriented in this particular field. Two significant categories of work exist for such a company. They include direct workers who work the activities in the manufacturing centers and are intellectually liable and support staff working in supplying warehousing and management of inventory (Jones, 2016).
The in-house activities can be spread across various regions to cater for quick access to products and allow for easier collaboration with manufacturing partners. The core business of biotech firms is in RnD. McCoy (2017) outlines an example stating that ” A drug services and specialty ingredient firm based in France, Sequins operates 24 plants and seven R&D centers across Europe, North America, and Asia. Its pharmaceutical synthesis business includes facilities acquired from several long-standing players in the business, including PCAS and Uetikon in Europe and PCI Synthesis in the US.” Collaboration allows for easy access to production technology and market, as the drug is perishable and requires a ready market for use.
The location of the business still needs to be in a major transshipment route where it will allow for easy access of their products to shipping routes towards global centers where their products will be needed. Cities that operate as gateways or hubs will be perfect for freighting, as the physical geography of the regions will give the company a better advantage at reduced costs; a well-developed multimodal infrastructure will be key in this regard (Ng et al., 2018). As such, shipping routes and airport and other transport hubs that will ensure the high efficacy of the vaccines and better storage will be critical in defining their location (Todd, 2021). Also, considering the nature of operations and their complexities, the working environment needed for proper functionality requires stability assurances. The biotechnology firms will likely be located in highly developed countries where security is guaranteed and a steady stream of highly professional workers is available (DaSilva, Baydoun, and Badran, 2002).
The facility, being high risk, high reward area, will utilize some of the most advanced equipment to bring about drugs. There will be heavy machinery centered on ensuring adequate gas, water, and airflow, protective gears and measures, water and solid water facilities, quality control laboratories, warehouses, and other sophisticated equipment (Park and Baker, 2021). Unlike a huge equipment manufacturing firm, the amount of space that such research and production center use is significantly small as the end product is not of high volume but very delicate. This is because the in-house processes are usually heavily centered on research and development. Zainzinger (2020) outlines that other production processes are done outside as it is more profitable to outsource production, stating that “Increasingly, these outsourcing companies are big—much bigger than the biotech firms they are aiding. But that difference doesn’t bother many biotech executives, who appreciate the helping hand of a large, experienced partner.”
References
Albanese, S., Cicchella, D., Lima, A., & De Vivo, B. (2018). Geochemical Mapping of Urban Areas. Environmental Geochemistry: Site Characterization, Data Analysis And Case Histories, 133-151. https://doi.org/10.1016/b978-0-444-63763-5.00009-4
DaSilva, E., Baydoun, E., & Badran, A. (2002). Biotechnology and the developing world. Electronic Journal Of Biotechnology, 5(1). https://doi.org/10.2225/vol5-issue1-fulltext-1
Field, K. (2019). A Look Inside Tesla’s Fremont Automotive Factory — #CleanTechnica Field Trip. CleanTechnica. Retrieved 17 October 2021, from https://cleantechnica.com/2019/03/31/a-look-inside-teslas-fremont-automotive-factory-cleantechnica-exclusive/.
Ginsberg, A., & Spigelman, M. (2007). Challenges in tuberculosis drug research and development. Nature Medicine, 13(3), 290-294. https://doi.org/10.1038/nm0307-290
Higgins, T. (2019). Tesla Turns to China With U.S. Tax Credit Ending. WSJ. Retrieved 17 October 2021, from https://www.wsj.com/articles/tesla-turns-to-china-with-u-s-tax-credit-ending-11577810430.
Hill, J. (2021). Giga Shanghai: Tesla’s Gigafactory in China – The Borgen Project. The Borgen Project. Retrieved 17 October 2021, from https://borgenproject.org/gigafactory/.
Jones. (2019). Pfizer means $2.2 billion, 5,680 jobs to Kalamazoo area, study finds. Mlive. Retrieved 17 October 2021, from https://www.mlive.com/news/kalamazoo/2016/10/pfizer_means_22_billion_in_cap.html.
McCoy, M. (2017). Synthesizing a natural product. Cen.acs.org. Retrieved 17 October 2021, from https://cen.acs.org/business/outsourcing/big-pharma-estetrol-voclosporin-simufilam/99/i24.
Minh Hang, T., & DiGangi, J. (2018). Your cool new Samsung smartphone was brought to you by noise, pain, and miscarriages. Usatoday.com. Retrieved 17 October 2021, from https://www.usatoday.com/story/opinion/2018/03/14/your-cool-new-samsung-smartphone-brought-you-noise-pain-miscarriages-pham-digangi-column/397173002/.
Ng, A., Jiang, C., Larson, P., Prentice, B., & Duval, D. (2018). Transport Networks and Impacts on Transport Nodes. Transport Nodal System, 9-28. https://doi.org/10.1016/b978-0-12-811067-6.00002-x
Park, A., & Baker, A. (2021). Exclusive: Inside the Facilities Making the World’s Most Prevalent COVID-19 Vaccine. Time. Retrieved 17 October 2021, from https://time.com/5955247/inside-biontech-vaccine-facility/.
Todd, S. (2021). Ocean to compete with air for vaccine deliveries, says Maersk. Retrieved 17 October 2021, from https://www.lloydsloadinglist.com/freight-directory/news/Ocean-to-compete-with-air-for-vaccine-deliveries-says-Maersk/78669.htm#.YWybx-vMK00.
Toppr. (2018). Meaning and Characteristics of Business Environment. Retrieved 17 October 2021, from https://www.toppr.com/guides/commercial-knowledge/business-environment/meaning-characteristics-of-business-environment/.
Zainzinger, V. (2020). A long collaboration arrives at the production stage. Cen.acs.org. Retrieved 17 October 2021, from https://cen.acs.org/business/outsourcing/big-pharma-estetrol-voclosporin-simufilam/99/i24.

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