Renner’s Theory of Industrial Location (1960)
👤 Who was Renner?
George T. Renner was a notable geographer who tried to explain where and why industries are located, not just with one or two dominant factors (like Weber’s emphasis on transport), but by considering multiple interrelated factors.
His model is known as a “factor-oriented theory”, and it adds depth to earlier theories by focusing on industrial symbiosis and regional complementarities.
⚙️ Six Key Factors in Renner’s Theory
Renner identified six fundamental factors that influence the location of industries:
| Factor | Description |
|---|---|
| 1. Capital | Initial financial investment needed to set up industry |
| 2. Transport | Connectivity and cost of movement of goods & inputs |
| 3. Raw Material | Availability, purity, and weight-loss nature of inputs |
| 4. Market | Proximity to consumers and demand centers |
| 5. Power | Access to reliable and cheap energy sources |
| 6. Labour | Availability of skilled/unskilled workforce at reasonable cost |
📌 Note: These are location determinants, but each factor impacts differently based on the type of industry.
For example:
- A cement plant may depend more on raw material, while a software company needs more labour and capital.
🔄 Concept of Industrial Symbiosis
Renner introduced a unique concept in location theory:
👉 Industrial Symbiosis – When multiple factors or industries co-exist and support each other at a location.
He classified this into two types:
1️⃣ Disjunctive Symbiosis
- It occurs when different industries located in a region benefit from each other’s presence.
- They may not be directly linked in terms of input-output but share services, infrastructure, or labour pool.
🧠 Similar to Weber’s industrial agglomeration.
Example:
- Textile mills, dyeing units, and packaging industries located in Ludhiana.
2️⃣ Conjunctive Symbiosis
- This is more interdependent.
- One industry’s output becomes the input for another.
Example:
- A sugar mill producing molasses used by a nearby distillery.
- Or, a steel plant supplying raw material to an automobile manufacturer.
📐 Three Core Principles of Renner’s Theory
Renner derived three guiding principles from his study of industrial patterns:
1️⃣ All Six Factors Determine Cost and Location
No single factor is dominant always. All six contribute to:
- Total cost of production,
- And therefore, the suitability of a location.
🧠 Compare this to Weber’s theory that overemphasized transportation.
2️⃣ Industries Prefer to Locate Near Expensive Factors
“Locate closer to what costs more.”
This is an economic logic: If transport of a factor is expensive or the factor itself is costly (e.g. skilled labour, rare raw material), industry will prefer to set up near that factor to save costs.
3️⃣ Location Influences Transportation Costs
Not only does transport cost affect location (as Weber said), but the reverse is also true—
👉 The choice of location will affect the design of transport networks, frequency of supply, and long-term logistics cost.
📌 Criticism of Renner’s Theory
Even though Renner gave a well-rounded view, there are some limitations:
- Neglect of Economic Variations
- He assumed uniform economic context, but in reality, regional variations in prices, taxes, and infrastructure exist.
- Lack of Mathematical Modelling
- While this makes the theory simpler, it also reduces precision and makes comparison with other models harder.
- Demand Side Less Emphasized
- Like Weber, Renner focused more on supply factors than market demand dynamics (unlike Lösch).
🌟 Importance of Renner’s Theory
Despite its criticisms, Renner’s theory is appreciated because:
✅ It is comprehensive, not just transport-focused.
✅ It reflects real-world multi-factor choices.
✅ It introduced industrial symbiosis, which is foundational to modern cluster-based industrial policy.