The factors affecting the location of industries are the availability of raw material, land, water, labour, power, capital, transport and market. Industries are situated where some or all of these factors are easily available. Sometimes, the government provides incentives like subsidised power, lower transport cost and other infrastructure so that industries may be located in backward areas.
- Availability of infrastructure like roads, railways and connectivity to the neighbouring regions
- Skilled and educated population in the region with better demographics.
- Presence of large areas of land for construction of offices, colleges, recreational areas, entertainment zones etc.
- Subsidies or incentives from government of the region along with better facilities like common parking, restaurants, food courts in case of Silicon Valley of California or Electronic City of Bangalore etc.
- Areas which need lesser investments in terms of infrastructure, establishing or promotion of the businesses like Tier 2 or Tier 1 cities.
- Areas with better future prospects in terms of demographics (like Indian metros ), expansion of services, better climate, growth.