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Advantages of Localisation of Industries:

Many advantages are enjoyed by firms in the same industry. This includes:

(i) Cooperation among Localised Firms:
When localised firms jointly carry out bulk purchases of raw materials, it helps to cut down the cost per unit of materials since larger discounts are obtained. Through cooperation, joint research and marketing are carried out by firms which results in more profits to the business and also increases economies of large scale production.

(ii) Development of Subsidiary industries:
As a result of localisation of industries, other subsidiaries such as banking, insurance, hotel, etc., can spring up and provide services, because of the presence of many firms in an area which produce identical commodities.

(iii) Pooling of Skilled Labour is Possible:
Services of skilled labour is always available within the area, or from the other industries. A new firm which produces an identical commodity or rendering the same services may be encouraged to set up there.

(iv) Reduction in the Cost of Production:
The presence of very many firms which produce similar commodities can lead to a drastic cut in the cost per unit of materials. The cost to each firm will be lowered as a result of reduction in the cost of production.

(v) Development of Infrastructural Facilities:
When many firms are established in an area, there is always a great improvement made in infrastructure to meet the increasing demand of the people, such as roads, power supply, banking services, water supply, electricity, transport and communication. This enhances the development of the area.

(vi) Creation of Employment Opportunities:
The growth of many industries in an area leads to the creation of employment opportunities. Increase in production and the provision of special facilities for enjoyment and entertainment encourages development.