Question

Define agglomeration of industries

Answer 1

Agglomeration of industries refers to the clustering of related industries or businesses in a particular geographic location. This clustering can occur due to various factors, such as the availability of raw materials, labor, transportation infrastructure, markets, or government support. Agglomeration can lead to economies of scale, knowledge sharing, innovation, specialization, competition, and networking benefits among the firms in the cluster. However, it can also lead to externalities, such as congestion, pollution, and imbalanced development, if not well-managed. Examples of agglomerations include Silicon Valley for technology, Wall Street for finance, Hollywood for entertainment, and Detroit for automotive.