Question

What are footloose industries? Providing some examples discuss the key characteristics of a footloose industry.

Answer 1

Approach:

• In the introduction, write what do you understand by footloose industries and cite some examples of footloose industries.
• Write the key characteristics of a footloose industry.
• In conclusion, write the importance of footloose industries.

Answer:
A footloose industry is one which is not tied to any particular location or country and can relocate to another place without effect from factors of production such as resources, land, labour, and capital.
The footloose industry is such type industry which doesn’t have a strong locational preference as the input resources and output markets can be found in many places. These are called footloose as these types of industries are prone to relocation.
Although locational factors are not much important for footloose industries, those areas are preferred where input costs can be minimized and output realization can be maximized.
Some prominent examples of the footloose industry are watch-making, diamond cutting, precision electronics etc.

The key characteristics of a footloose industry are:

• These are less dependent on specific raw material, Most of the raw materials are small and light and can be transported easily.
• It needs skilled workers as the industrial process is advanced and major work needs high-quality precision.
• Like the inputs, the output is lightweight and can be easily transported to the markets. Most of the footloose industries produce low volume and high-value outputs.
• These are environment-friendly industries as the process involved in these industries has a negligible carbon footprint.
• It prefers a location which is peaceful and cost-friendly as to attract human capital.
• Also, location with a good connectivity of roads, railways, telecommunication, airways etc. are preferred to facilitate quick movement of skilled workers and high-value outputs.
• Located close to similar industries to harness the benefits of agglomeration effect through the exchange of ideas and resources.

These industries are crucial for the development of areas which lack locational advantages with respect to heavy and small industries like port facilities, availability of raw materials, etc. Good development of footloose industry can provide high-value employment opportunities and competitive advantage in world trade.