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

Step 1: Analyze the question We need the disadvantage of localization of industries. Localization means firms in the same industry concentrate in one area (e.g., oil firms in the Niger Delta, or textile firms in Kano).

Step 2: Explain the concept Localization has these advantages:

• Skilled labour is available and develops over time.
• Subsidiary and ancillary industries grow nearby (suppliers, repairers, transporters).
• Firms cooperate and share facilities such as banking, training and research.
• Costs of production fall through external economies of scale.

Its disadvantages include:

• Over-dependence on one industry, so any decline in that industry hurts the whole area.
• Structural unemployment if the industry declines or technology changes, because workers' skills are specific to that industry.
• Pressure on housing, transport and other social amenities.
• Pollution and congestion.

Step 3: Evaluate the options

• A. Cooperation among firms is an advantage.
• B. Creating structural unemployment is a disadvantage. If the dominant industry collapses, many workers with the same specialised skills lose their jobs at once.
• C. Encouraging subsidiary industries is an advantage.
• D. Growth of skilled labour is an advantage.
• E. Reduced cost of production is an advantage.

Step 4: Answer The correct option is B. Creating structural unemployment.

Tip: For "advantage or disadvantage of localization" questions, remember that advantages are about clustering benefits (skills, suppliers, lower costs). Disadvantages are about putting all eggs in one basket (unemployment, dependence, congestion). If an option mentions a negative like unemployment, it is probably the disadvantage.