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okay in this video we're gonna be looking at the site and situation factors that determine location of Industry if you remember earlier in the course we did introduce the concepts of site and situation now they're coming back in a more specific way throughout this video you're gonna be considering site factors which includes land labor and capital situation factors and then the idea of bulk gaining or bulk reducing industries and the types of transportation that are used in modern industry so in class we discussed what is industry and the importance of the industrial revolution now we're going to look more specifically at where local industry is actually located based on site and situation factors so looking at situation factors from the bulk reducing perspective this is all going to be based on the proximity to inputs in other words the resources or things that are used in the manufacturing or the production of a good and that the factories themselves are going to locate themselves near those resources or inputs because they tend to be too expensive to ship or too bulky in other words to be able to transport to a factory a great distance so the classic example of this in the United States is in the steel industry in the steel mills of the earlier 20th century we look around the Great Lakes region and you look at the deposits of coal and iron that were you know around the Great Lakes region that are both important inputs in to the creation of steel the steel industry is located on near those bodies water because they could easily be transported across the lakes and/or nearby from the coal fields or the coal mines and so you know those heavy inputs that they have to transport in order to make something that also is very difficult and the steel mills themselves were located right on rail rail lines that went right into the urban areas or also near the main auto manufacturing of near Detroit so looking at the idea of a bulk reducing industry we're just looking at something that is too heavy to actually transport before going through the manufacturing process and so some of the weight or the bulk is lost in the process making it a little more efficient or cost-effective to ship to market when it's completed another situation factor we look at it beep rocks in concerning proximity to markets or proximity is to markets as the bulk gaining industry this is where we have something that's being produced that's adding bulk or weight that makes it expensive to bring to market to have it shipped in other words the inputs themselves maybe aren't that heavy but when you put them together in the finished product it's it's heavier or more difficult to transport it could be bulky usually it's because of weight but it could be just because it's a difficult good to transport but things like fabricated metal metals beverage production is a classic example that when you add when you take bottles or cans of anything that adds the liquid weight makes it very heavy and difficult to transport and so we see this very these locations are gonna meet a very near the place where they're gonna be ultimately be consumed and so some of the examples again are the beverage industries of bulk gaining industry perishable products like milk where you want to get it very quickly into the market into the hands of consumers or what you call single market manufacturers this is something like car parts that there's maybe a factory that makes us very specific part for Ford cars well most likely they're going to locate themselves very near Detroit Michigan where most of or many of the Ford cars are produced in America so the proximity markets for bulk gaining industries and proximity to inputs for bulk reducing industries and again based on the the cost of transportation what you might realize is we're starting to look at some very similar characteristics as we did in agriculture that ultimately businesses or consumers or factory owners and just as farmers are trying to make a profit and so they're gonna try to minimize their cost as much as possible so when we consider either bulk reducing or bulk gaining industries we also consider what are the cost of transportation and that has changed drastically over time and so today when we look at the different types of transportation whether we use shipping containers railroads trucks or air is largely again depend on what type of good it is and whether or not what's the bulk of the the actual finished good that's being transported because the different types of of shipping methods have different advantages and disadvantages and so when we look at the cost it's you know to ship by you know container ships it's very cheap but it's slow and it's not as accessible to all the markets as other methods of transportation trains tend to be for longer distance and very bulky things but again oftentimes there's a what's called a Break of bulk point where maybe the train or the ship is unloaded on two semis and trucks where they're going to be usually located not transported for shorter distances to bring to market the last one we can look at is the air travel this is very fast but it's limiting in terms of how much weight you can use and it's very expensive relative to the other methods of shipping so situation factors are really important for industry because depending on what they're producing they're going to need to know what what method of transportation they'll have access to and also what is going to be most cost effective now transitioning to site factors there's three major ones that are going to affect site now site is going to be what is it like once you're there so there might be great situational factors but there's three major things that are important for site factors and you might remember these same concepts from economics one is labor and this is probably the most important because it's the most expensive in the production of any good or service that the cost of producing or of anything there's an input of labor usually the human effort into the product and usually businesses that are very labor intensive are gonna focus on locating themselves where labor is relatively cheap a perfect example of modern-day economics global economics is looking at Bangladesh there are garment industry because labor is so cheap you see many clothing manufacturers having their clothing and garments produced in blank Bangladesh because that's where the labor costs are the lowest even if they have to ship it a great distance to get it back to the US markets another factor is land in the past factories would locate because of the site factor of labour factories would locate right in urban areas where the labor was accessible and very nearby and usually they had small footprints in other words they had vertical oriented buildings in other words they'd have several floors and the factories would be at various floors in the building but it was usually in urban areas where they could get to labor today that's changed because a more effective method of production is to have these factories being more horizontally or using much more space it makes it easier to produce and streamline the production process and land it tends to be much cheaper than an urban area what's changed well we can look at the distribution there's freeways and highways the population is shifted out of urban areas and into more rural or suburban areas and we've also added more mechanization so unless people are needed to you know in terms of human labor to produce things so this has become a very popular model in present day manufacturing but again keeping in mind even if it's in a rural or a suburban area usually these are going to be located on very accessible routes of transportation whether it's on a direct rail line a major interstate highway near a major airport etc the last one of site factors is capital when we look at capital we often think of the equipment or machinery we talk about that in economics the things that help you produce more things but we also think about the capital that's used to purchase or obtain that and those resources and so that's there's a financial capital and capital is also is you know where you can find those other human capital like people with the same skills but usually the the funding or the expertise or the the resources in order to expand or to run a business a perfect example of this would be Silicon Valley in the United States outside of San Francisco California this has become the technology hearth or Center of really global technology and there's a lot of capital that flows into any company or engineer ideas that have merit there are oftentimes resources that are willing to be that people are willing to give to those ideas to see if they'll flourish and so if you are a technology company it's likely you will relocate or at least have an office in Silicon Valley to be able to access those capital resources or take advantage of the the commonality of industry that is located there if you look at Silicon Valley it's one of the most heavily invested areas in terms of capital today in the industry in American industry so hopefully this is a brief summary you can highlight the different factors of site factors situation factors and then the difference between bulk gaining