Economic overhead capital (EOC) is a serious requirement for all manufacturing activities. This is the availability of roads, railways, ports, power lines and service facilities. Social overhead capital (SOC) such as schools, universities, hospitals, and libraries aren’t needed as much but can be an indicator of the stage of development of a country. Due to infrastructure being very expensive, it is important to try and locate in an area with already established infrastructure which will...
Economic overhead capital (EOC) is a serious requirement for all manufacturing activities. This is the availability of roads, railways, ports, power lines and service facilities. Social overhead capital (SOC) such as schools, universities, hospitals, and libraries aren’t needed as much but can be an indicator of the stage of development of a country. Due to infrastructure being very expensive, it is important to try and locate in an area with already established infrastructure which will allow for lower fixed costs. This is apparent to any business and investment has been put into creating industrial estates which cater to this exact need. These industrial parks are made with ‘bulk transportation access and access to existing or new population centers’. They are made primarily with the idea of businesses in mind and so are cheap, accessible and in areas of industry. However, for many types of business, they aren’t vital as they are essentially just buildings. Examples of businesses with no use for them are businesses with less than three employees and self-employed workers, and in the UK, 96% of all businesses in 2017 had 0-9 employees proving the need for industrial parks isn’t all too large, so the importance of this factor is quite low for the majority of businesses.
