1. Part two -- industry
Diffusion of industry and location
theories

2. The first Railroad in England opened in 1825 and by 1830 Manchester and Lancaster were
connected by rail

3. Diffusion to Mainland Europe
• Early 1800s innovations
diffused to mainland
Europe-Low Countries &
Germany
– Location criteria-proximity
to coal fields
– Connection to a water port
• Latter Diffusion in late
1800s innovations
– Location criteria-access to
railroads strengthened
Paris and London as
manufacturing centers

4. Over 50% of goods entering Europe arrive at two ports in the Netherlands

5. Diffusion of the Industrial Revolution

6. Diffusion to Mainland Europe
• A belt of coal fields stretch
along southern edge of North
European Plain-northern
France, Netherlands, German
Ruhr, western Bohemia &
Silesia
• Rotterdam, Netherlands-
located on the Rhine-connects
Ruhr Valley to the sea-most
important port of Europe
• Paris-luxury items-jewelry,
perfume, fashions plus
metallurgy and chemicals-
LeHavre major port connects
Paris with the sea

7. Diffusion of
Industrial
Revolution

9. The Paris Basin is the Industrial base of France. Rouen (above)
is at the head of navigation point on the Seine River.

10. How do Location Theories explain
Industrial Location?

11. Location Theory
• Location Theory – predicting
where a business will or
should be located.
• Location of an industry is
dependent on economic,
political, cultural features as
well as whim.
• Location Theory Considers:
– Variable costs-energy,
transportation costs & labor
costs
– Friction of distance-increasing
distance =increased time &
cost

12. Location Models
Weber’s Model-The Least Cost Theory
Alfred Weber, (1868-1958) a German economists, published Theory of
the Location of Industries in 1909. His theory was the industrial
equivalent of the Von Thunen Model.
Manufacturing plants will locate where costs are the least.
Three Categories of Costs:
Transportation-the most important cost-usually the best site is where
cost to transport raw material and finished product is the lowest
Labor-high labor costs reduce profit-location where there is a supply
of cheap, non-union labor may offset transportation costs
Agglomeration-when a group of industries cluster for mutual benefit-
shared services, facilities, etc.-costs can be lower
Deglomeration-when excessive agglomeration offsets advantage-
eastern crowded cities

13. Location Models
• Hotelling’s Model-Harold
Hotelling (1895-1973) this
economist modified Weber’s
theory by saying the location of
an industry cannot be
understood with out reference to
other similar industries-called
Locational Interdependence
• Losch’s Model-August Losch said
that manufacturing plants choose
locations where they can
maximize profit. Theory: Zone of
Profitability

14. Losch’s Model-Zone of Profitability