An Introduction to Industry

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An Introduction to Industry

Agglomeration: The concentration of different parts of the same industry in one area, which has many advantages including lowering transport costs and easing access to each part.

Brownfield sites: Reclaimed industrial or residential land that is cleared and made available for development.

Capital: The money invested in companies to allow them to start production.

Communications: An all-encompassing word for all transport methods as well as phone, fax and e-mail.

Footloose industry: An industry that is not tied to a location by its need for raw material.

Greenfield sites: Rural land, often just outside cities, that is cleared and used for industry, often Science and Business Parks.

Labour: The workforce.

Market: Where the company will sell its product. The market for many large companies nowadays is the entire world.

Multi-national companies: Large corporations, with their headquarters in a developed country, who have factories in countries all over the world. This gives them access to cheap labour, cheap land and the world market.

Trans-national companies: See 'Multi-national companies'.

Any industry can be viewed as a system, with inputs, throughputs (or processes), outputs and feedback. The diagram below shows how these link together:

The systems model for industry

Inputs can be divided into two groups. Physical inputs are naturally occurring things such as water, raw materials and the land.

Human or Cultural Inputs are things like money, labour, and skills.

Processes or Throughputs are the actions within the industry that change the raw materials into the finished product. For instance, all the processes needed to change pieces of wood into a chair.

Outputs can be negative or positive, although they are usually the latter. Negative outputs include waste products, suchas off-cuts. The positive outputs are the finished product and the money gained from the sale of that product.

Feedback is what is put back into the system.

The main two examples of this are money, from the sale of the finished product, and knowledge, gained from the whole manufacturing process. This knowledge could then be used to make the product better of improve the efficiency of the processes.

A very good example of an industrial system is the car manufacturing industry, like the Rover factory at Longbridge in Birmingham.

This is actually more of an assembly industry as most of the parts are made elsewhere and then brought to Longbridge to be put together.

Car industry example