Alfred Weber, a German economist, enunciated a systematic theory of industrial location in 1909. Weber’s theory of location is purely deductive in its approach. He analyzed the factors that determine the location of industry and classified these factors into two divisions. These are:
(i) Primary causes of regional distribution of industry (regional factors)
(ii) Secondary causes (agglomerative and deglomerative factors) that are responsible for redistribution of industry.
(i) Primary Causes (Regional Factors)
According to Weber, transport costs and labour costs are the two regional factors on which his pure theory is based. Assuming that there are no other factors that influence the distribution of industry, except transportation costs. Then it is clear that the location of industry will be pulled to those locations which have the lowest transportation costs. The key factors that determine transportation costs are
(i) the weight to be transported and
(ii) the distance to be covered.
Weber lists some more factors which influence the transportation costs such as – (a) the type of transportation system and the extent of its use, (b) the nature of the region and kinds of roads, (c) the nature of goods themselves, i.e., the qualities which, besides weight, determine the facility of transportation.
However, the location of the place of production must be determined in relation to the place of consumption and to the most advantageously located material deposits. Thus, ‘locational figures’ are created. These locational figures depends upon (a) the type of material deposits and (b) the nature of transformation into products.
Weber classifies and calls those raw materials, which are available practically everywhere as ‘ubiquities’ (like brick-clay, water, etc) and ‘localised’ (like iron-ore, minerals, wood, etc) which are available only in certain regions. It is clear that localized materials play a more important role on the industry than the ubiquities. Further, regarding the nature of the transformation of materials into products, Weber categorized the raw materials as ‘pure’ and ‘weight losing’. Pure materials impart their total weight to the products (eg. cotton, wool, etc) and the materials are said to be ‘weight losing’ if only a part enters into the product (eg. wood, coal, etc.). Hence, the location of industries using weight-losing materials is drawn towards their deposits and that of industries using pure-materials towards the consumption centres.
Weber further examines the cause of deviation of industrial location from the centres of least transport costs. The existence of differences in labour costs leads an industry to deviate from the optimal point of transport orientation. Geographical distribution of the population would give rise to differences in wages for labour. Naturally, the transport oriented location of an industry is drawn out and attracted towards the cheaper labour centres. Such migration of an industry from a point of minimum transport costs to a cheaper labour centre may be likely to occur only where the savings in the cost of labour are larger than the additional costs of transport which it ought to incur.
(ii) Secondary Causes (Agglomerative and Deglomerative Factors)
An agglomerative factor is an advantage or a cheapening of production or marketing which results from the fact that production is carried on at one place. A deglomerative factor is a cheapening of production which results from the decentralization of production i.e., production in more than one place. To some extent these agglomerative and deglomerative factors also contribute to local accumulation and distribution of industry. These factors will operate only within the general framework formed by the two regional factors, i.e., costs of transportation and costs of labour. The advantages which could be derived in this context are external economies.
The pulls which the agglomerative factors possess to attract an industry to a particular point are mainly dependent on two factors. Firstly, on ‘the index of manufacture’ (the proportion of manufacturing costs to the total weight of the product) and secondly, on the ‘locational weight’ (the total weight to be transported during all the stages of production). To deduce a general principle, Weber uses the concept of “co-efficient of manufacture” which is the ratio of manufacturing cost to locational weight. Agglomeration is encouraged with high co-efficient of manufacture and deglomeration with low co-efficient of manufacture and these tendencies are inherent in their nature.
Productive activities could be divided depending on the nature of raw-materials, industry and market. Weber considers the location for an industry at more than one place. According to Weber, a split of production into several locations will be the rule for productive process which can technically be split. For instance, the first stage of production may be near the raw material deposits and the subsequent stages near the place of final consumption. Likewise, in a paper industry the manufacture of pulp may be carried on near the supplies of the raw materials and the second stage of paper manufacture near the consumption outlet.
Weber also conceived the advantages of setting up different types of industries in the same locality. The production of quite different articles may be combined in one plant because several raw materials may diverge from a common source. This may be either due to technical or economic reasons: for instance, certain chemical industries, garments factories which manufacture over-coats, shawls, blouses, etc. Locational coupling may also occur due to connection through materials. If the by-product of an industry happens to be the raw material of another industry, then the two industries may select a single place of location. For instance, the dye-stuff industry is connected with other industries using coke, because coal tar (upon which the dye-stuff industry is based) is a by-product of the burning coke.
Weber’s theory of location has been criticized on various grounds which may be summarized as follows:
1. Weber has been criticized for his unrealistic approach and deductive reasoning. According to Sargant Florence, vague generalizations cannot provide suitable solutions to the theory of location as non-economic considerations will also influence which are not mentioned in the pure theory. He says that Weber’s theory fails to explain locations resulting from historical and social forces.
2. A.Predohl criticizes Weber’s theory as more a selective theory than a deductive theory. The very distinction between primary and secondary is itself artificial, illogical and arbitrary.
3. Weber assumes fixed labour centres and unlimited supplies of labour which are unrealistic. The rise of industry may create new labour centres and we cannot assume unlimited labour supplies at any centre.
4. In a competitive market structure, the assumption of fixed points of consumption is unrealistic. Country-wise scattering, usually, of consuming public is a reality and there may be a shift in the consuming centres with a shift in industrial population.
5. A. Robinson also considers Weber’s division of raw materials into ‘ubiquities’ and ‘localised’ as artificial.
Weber’s deductive theory of location, in spite of the shortcomings, is the only theory which has been enjoying the universal acceptance and application, as all the other alternative suggestions are neither complete nor comprehensive.