Which of the following is a disadvantage of localization of industries?

Step 1: Analyze the question The question asks for a disadvantage of localization of industries. Localization means industries of the same kind concentrate in one particular area, such as oil firms in the Niger Delta or textile firms in Kano.

Step 2: Explain the concept Localization usually brings these advantages:

• Pool of skilled labour: workers develop specialized skills in the area (option C).
• Subsidiary and ancillary industries: supporting firms like suppliers, repairers and transporters spring up nearby (option D).
• Lower production costs: firms enjoy external economies of scale, shared infrastructure and easy access to inputs (option B).

Its disadvantages include:

• Over-dependence on one industry: if the industry declines, the whole area suffers.
• Structural unemployment: workers with highly specialized skills cannot easily find jobs elsewhere when demand for that industry falls or technology changes.
• Traffic congestion, pollution and pressure on infrastructure.
• Higher land prices and rents.

Step 3: Evaluate the options

• A. Creating structural unemployment: a disadvantage. When the localized industry declines, specialized workers are left jobless in that region.
• B. Reducing cost of production: an advantage.
• C. Encouraging the growth of skilled labour: an advantage.
• D. Encouraging subsidiary industries: an advantage.

Step 4: Answer The only disadvantage listed is A. Creating structural unemployment.

Exam tip: In "advantage or disadvantage" questions, three options usually share a positive theme (lower cost, skills, supporting industries) and one stands out as negative. Look for the odd one out. For localization, remember: over-dependence on one industry means structural unemployment when it collapses.