Free «Effects of industrial location on economic growth and income distribution» Essay Sample

Israel is country that was established after the Second World War. It is surrounded by enemies and has little natural resources. Location of industries in a country is of great essence to a countries economy. The major reason is that industries need to locate where the production process is most effective in terms of availability of raw materials and supporting infrastructure. The industries locate where they can easily access what is needed in their production. They also consider how quickly they can get their product to the market. If these two are favorable coupled with efficient technology the return to the industry are good and in turn their contribution to the economy is also good. These industries also do affect the income distribution in pattern in a country. In the places where they are established the people benefit from employment in the industries. Their incomes rise to more than those of other people in places where there are none.

In the case of Israel the high tech industries are located in Tel-Aviv which is the center of the country. These are the industries that offer high wages. The other low-tech industries that offer low wages are located away from the center in the areas where population is sparse. This division has been seen to have relationship with the income disparities and the economies decline. The high tech industries have the power to compete unfairly with the traditional industries both locally and globally. This hurts the social ties in the country due to the income disparities that come along with the dual economy. The entrepreneurs need to take into consideration their industrial location as part of their corporate social responsibility. They should consider setting up in the other regions of the country for the people to benefit from the effects of fair wages in all regions of the country. The startup entrepreneurs can benefit from the governments incentives and pull themselves up. The traditional industries can benefit from these incentives too. Over time with incentives the income will be evenly distributed across the country for the benefit of all.


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